Data centres at a crossroads: Can capital keep up with demand?

As the data centre industry continues to evolve at rapid pace, it has never attracted more investment. However, as development pipelines stretch across markets once considered too peripheral, the Metro Connect USA 2026 panel Data Centers at a Cross-Roads: Will Demand Sustain the Financing Surge? examined if infrastructure is able to keep up with the financing.

Moderated by Dorina Yessios, co-head of energy and infrastructure at A&O Shearman, the discussion brought together voices from across the data centre industry to examine where the real constraints lie and what comes next for the sector’s financing world.

“It’s grown so much that it is not the second-largest sector I the bank loan market,” said Benjamin Velazquez, managing director, head of Americas project finance, load distribution group at ING. “The future’s bright, there are some clouds on the horizon, but it’s nothing we can’t navigate.”

Power: the constraint that is reshaping everything

Power continues to be the one consistent issue that cuts across every part of the market, the panellists agreed. Jeffrey Moerdler, partner at Haynes Boone, said he has watched the industry’s relationship with energy transform almost entirely in three years.

“The dynamic has changed,” he said. “Lock up the power first, figure out the specific location second.”

He said his team is currently working on roughly 40 power-related deals, with one client describing their approach as being a “truffle hunter” – searching for areas of excess utility capacity, mapping transmission capability and only then identifying the property.

It is the reverse of how the industry has traditionally operated.

Moerdler estimated that around a quarter of the deals he is working on will succeed in delivering power within 12 to 24 months. Another quarter will slip to 24 to 48 months.

“That shift is going to continue because utilities simply can’t keep up with the growth in the industry,” he said. “Between a quarter to a half of them will die on the vine.”

He added: “Utilities that used to see demand increases of one per cent per year are now seeing increases of 25 to 100% a year.”

Warren Roll, managing director and head of digital infrastructure at Fengate, pointed to transmission as the more fundamental bottleneck.

“The bigger part of the problem is not generation – it’s getting the power where you need it when you need it. That’s what creates the long lead times.”

For Leanne Starace, SVP of global technical sales at Equinix, one of only a handful of publicly traded pure-play data centre companies globally, the problem goes deeper than generation.

“It’s not just the quantity of power, it’s the density,” she said. “Server rack power used to be 3 kW per rack for general-purpose compute. Now we’re seeing up to 150 kW per rack for AI inferencing and high-performance computing.

“The cooling and power distribution infrastructure required for those density levels simply wasn’t designed for this reality. And it’s only going to get denser.”

Labour, capital and upcoming consolidation

Talent gaps across the data centre sector continue worldwide, creating more issues for businesses wishing to scale. For Ted Morcarski, senior partner and head of digital infrastructure at Novacap, this is a familiar pressure point.

“If you don’t have a meaningful labour pool, if you don’t have experienced people on the team, if you don’t have access to the contractor and subcontractor relationships – that’s a problem we can’t get over,” he said.

Starace agreed, adding: “Delivering a quality product on time is non-negotiable when you have stringent SLAs with anchor tenants.”

The medium-term picture, Roll suggested, is one of significant consolidation, with vast amounts of capital needed to find an exit.

“The bottom line is that, within the next year or two, you will likely see one or two public companies acting as consolidators for a significant portion of this industry,” he said. He also raised concerns about the GPU-cloud sector specifically, suggesting that it risks “being a WeWork 2.0” and said “there’s a structural mismatch between the long-term leases they’re signing and the short-term agreements they have with their own customers.”

What is not in doubt is the underlying demand, with each panellist arguing that financing will just have to keep up.

As Starace put it: “This is not a bubble – it’s fed by real demand. The digitalisation is real, the AI demand is real.”

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