The $1.2 Trillion Data Center Buildout: How Private Investors Get Exposure

Artificial intelligence runs on buildings. According to JLL, roughly 100 gigawatts (GW) ofnew data center capacity is expected to come online globally between 2026 and 2030, creating about $1.2 trillion in real estate asset value and requiring roughly $870 billion in new debt financing.¹

Private capital is leading the charge. Private equity accounted for 72% of the $63.35 billion in U.S. data center deals that S&P Global Market Intelligence tracked in 2025, although S&P notes that a single deal, a roughly $40 billion acquisition, drove the private equity total.²

For investors whose portfolios still look like a traditional 60/40 mix, the question is how to invest in data centers beyond owning large technology stocks. Below, we map four access routes and each risk. For the broader infrastructure picture, see our guide on data center investment.

Why Data Centers Are Drawing Private Capital

Demand has rapidly outpaced supply. In the first half of 2026, primary North American markets reached a record 10,903 megawatts of supply, up 33.7% year over year, yet vacancy fell to a record low of 1.4%.³

A hyperscale data center campus, built for the largest cloud providers (known as hyperscalers), is also expensive and heavily debt-financed, which helps explain why private equity, infrastructure funds, private lenders, and public REITs are all involved.

Four Ways to Invest in Data Centers

1. Infrastructure Funds

Many private infrastructure funds now own data center platforms alongside power and fiber assets. Private infrastructure funds raised a record $250.7 billion in 2025, up more than 150% from 2024.⁴

●    What you own: Stakes in operating or development-stage platforms,usually across several assets.

●    Trade-offs: Long holding periods, limited liquidity, and eligibility rules that often require accredited investor or qualified purchaser status.

●    Power and tenant exposure: Development-stage platforms carry the most power risk. Diversification softens, but does not remove, reliance on a few large tenants.

2. Private Real Estate

Private real estate funds treat data center real estate as a specialized property type, owning powered buildings leased to large tenants. CBRE reports that capital formation has shifted toward open-end funds (funds that accept new capital on an ongoing basis), which favor high-quality properties with long lease terms.³

●    What you own: Stabilized (fully built and leased) or development-stage buildings.

●    Trade-offs: Periodic valuations and redemption limits.

●    Power and tenant exposure: A building's income often depends on one or a few hyperscale tenants, so their credit and lease terms matter as much as the property. Learn more about real estate investing.

3. Private Credit

Morgan Stanley has projected a roughly $800 billion opportunity for private credit in data center financing through 2028, led by asset-based finance (loans secured by specific assets and their cash flows).⁵ JLL reports that construction loans backed by top-tier hyperscaler leases price at spreads in the low 200 basis points (about 2 percentage points), with leverage up to 85% of cost, while weaker-credit deals generally price 2 to 3 percentage points wider than investment-grade construction loans.⁶

●    What you own: Loans secured by data center projects, earning contractual interest rather than ownership upside.

●    Trade-offs: Returns are limited to the loan's terms, and loans are generally illiquid.

●    Power and tenant exposure: Lenders feel power delays early, because a late project delays the revenue that repays the loan. Weaker tenants mean wider spreads, but more credit risk. Explore private credit investing.

4. Public Data Center REITs

Publicly traded real estate investment trusts (REITs) trade daily, which makes them the most liquid route. That liquidity comes with market volatility. Data center REITs lost 14.2% in 2025, then gained 33.2% through mid-2026.⁷

●    What you own: Shares in listed companies that own data center portfolios.

●    Trade-offs: Prices move with the stock market and interest rates, not just property performance.

●    Power and tenant exposure: Listed companies carry the same exposures as the buildings they own, and share prices can react quickly to either.

Example: Consider a hypothetical campus pre-leased to one hyperscale tenant. A private credit fund might finance construction, an infrastructure or real estate fund might own the equity, and once the campus is operating, a public REIT might buy it. Each investor owns a claim on the same building and tenant, but faces a different primary risk: the lender, delivery and repayment; the equity owner, cost overruns and sale value; the REIT shareholder, market swings.

What to Look For

●    Tenant credit: Is the lease backed by an investment-grade (strong credit rating) hyperscaler or a smaller, sub-investment-grade AI cloud provider?

●    Power status: Is power secured and energized, or still waiting on autility connection?

●    Stage and leverage: Development projects carry more risk than stabilized assets. Know how much debt sits in the structure.

●    Liquidity terms: Match lockups and redemption windows to when you may need the capital.

Risks to Consider

●    Power constraints: JLL cites four-year grid connection delays as a key constraint on new supply.⁸

●    Tenant concentration: Moody's notes that most new capacity is pre-leased by hyperscalers, which concentrates risk in a handful of tenants.⁹ Newer, sub-investment-grade AI cloud tenants add further credit risk.¹⁰

●    Local opposition: CBRE reports that community engagement is now a development constraint on par with power procurement.³

●    Demand: Moody's also notes growing questions about whether this level of spending is sustainable.⁹

●    Illiquidity: Private vehicles are valued periodically and may limit redemptions during stress.

Getting Exposure on the Right Terms

JLL describes the buildout as an infrastructure investment super cycle.¹ For individual investors, the real decision is where in the capital stack to sit:lending emphasizes contractual income, ownership adds growth potentialalongside more risk, and listed shares add liquidity at the cost of volatility.

Institutionsand sovereign wealth funds have long dominated the private side of this market. HUDSONPOINT capital works to help eligible individual investors evaluate private market opportunities in digital infrastructure. Eligibility for private investments depends on accredited investor or qualified purchaser status and on an individual suitability review; these investments are not appropriate for every investor. To discuss how data center exposure could fit within your portfolio, schedule a meeting with one of our Private Wealth Managers.

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^Sources

^{1. JLL,"2026 Global Data Center Outlook," January 2026. https://www.jll.com/en-us/insights/market-outlook/data-center-outlook}

^{2. S&PGlobal Market Intelligence, "Private equity investment surge sends US datacenter deals to 5-year high," May 12, 2026. https://www.spglobal.com/market-intelligence/en/news-insights/articles/2026/5/private-equity-investment-surge-sends-us-data-center-deals-to-5-year-high-100947405}

^{3. CBRE,"North America Data Center Trends H1 2026," August 2026. https://www.cbre.com/insights/books/north-america-data-center-trends-h1-2026}

^{4. S&PGlobal Market Intelligence, "Rising private infrastructure fundraising;data center investment boom," May 15, 2026 (citing With Intelligencedata). https://www.spglobal.com/market-intelligence/en/news-insights/articles/2026/5/rising-private-infrastructure-fundraising-data-center-investment-boom-101708422}

^{5. MorganStanley Research, "Bridging a $1.5tr Data Center Financing Gap," July2025. https://www.morganstanley.com/content/dam/msdotcom/en/assets/pdfs/Research_Bridging-Data-Center-Gap.pdf}

^{6. JLL,"North America Data Center Report Midyear 2026," August 2026. https://www.jll.com/en-us/insights/market-dynamics/north-america-data-centers}

^{7. Nareit,"Data Center REITs Continue to Pique Investor Interest, Post StrongPerformance Gains," July 15, 2026. https://www.reit.com/news/articles/data-center-reits-continue-to-pique-investor-interest-post-strong-performance-gains}

^{8. JLL,"Global data center sector to nearly double to 200GW amid AIinfrastructure boom," January 6, 2026. https://www.jll.com/en-us/newsroom/global-data-center-sector-to-nearly-double-to-200gw-amid-ai-infrastructure-boom}

^{9. Moody's,"How will the 2026 digital economy be impacted by changes in artificialintelligence, digital finance, cyber risk, and data centers?" (DataCenters Outlook 2026 section), accessed September 23, 2026. https://www.moodys.com/web/en/us/creditview/blog/digital-economy-2026.html}

^{10. Ropes &Gray, "Data Center Investment in 2026: AI Demand, Power Constraints, andPrivate Equity Trends," May 21, 2026. https://www.ropesgray.com/en/insights/viewpoints/102mvfl/data-center-investment-in-2026-ai-demand-power-constraints-and-private-equity}

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