Investor confidence is returning to digital infrastructure, but the deals being done in 2025 look very different from just a few years ago.

Control transactions are back, fibre is consolidating fast, and joint ventures are unlocking capital in a higher-cost environment.

Meanwhile, AI’s infrastructure demands continue to surge despite DeepSeek’s disruptive promise, with hyperscalers doubling down on capacity and power constraints becoming a competitive battleground.

How are dealmakers adapting? And where is the smart money heading next?

Brandon Howald, partner – Ropes & Gray (moderator)
Valtin Gallani, head of TMT finance and advisory – Societe Generale
Todd Holder, managing director – TD Securities
Jason Hill, managing director, global co-head for TMT – Houlihan Lokey
Felix Boyeaux, director for infrastructure – KKR
Horace Zona, managing director for credit – Digital Bridge

After a period dominated by minority equity deals and growth capital injections, experts at Metro Connect 2025 suggested that control transactions are firmly back on the table in the digital infrastructure space.

Multiple panellists agreed that valuations have adjusted to a level where deals that previously stalled over bid-ask gaps are now achievable, prompting a fresh wave of strategic M&A.

Todd Holder, managing director and global head of infrastructure M&A at TD Securities, underscored the shift: “The control transaction is back… Transactions that couldn’t get done 18 months ago because of a bid-ask spread can get done today.”

He pointed to a market environment that has become more constructive on the financing side, which in turn is enabling more ownership-changing deals.

Jason Hill, managing director and global co-head for TMT at Houlihan Lokey, framed the shift as a broader evolution in market confidence.

“The deal environment continues to be very active,” he said, citing a rebalancing between financing and full M&A activity, especially in fibre and data centres.

Hill noted that structured transactions had become more common in recent years, but those are now increasingly being complemented by classic buyouts.

Horace Zona, managing director for credit at DigitalBridg,e took a longer view, highlighting a renewed conviction among investors: “There should be more activity. We have an environment that’s very constructive—economically, regulatorily, and from a capital markets perspective. The investor mindset has changed.”

Whereas 12 to 24 months ago, buyers were still trying to “take a little bit of a chunk out of the hide of the seller,” Zona contended that the current climate is far more growth-oriented.

Valtin Gallani, head of TMT finance and advisory at Societe Generale, has witnessed a similar dynamic, though he noted that while capital is available, it is more expensive than in years past, making financing structures and risk-sharing more important—but also more sophisticated.

“We’re seeing new institutional funds willing to take on more risk,” he said, describing a market where private capital is bridging the valuation expectations of sellers and the return hurdles of buyers.

If there’s one area of digital infrastructure where M&A is heating up fast, it’s fibre. Despite the fibre market being highly fragmented, particularly in residential and enterprise fibre, experts at Metro Connect described it as ripe for consolidation.

Houlihan Lokey’s Hill noted that fibre remains one of the most active corners of the deal market, alongside data centres. He said that consolidation will continue to drive transactions, as operators seek scale not just to cut costs, but also to unlock access to capital.

“A lot of these fibre plays have had backing for several years now,” he said, adding: “They’re going to need more capital to continue to grow.”

Scale, Hill suggested, makes operators more attractive to large infrastructure funds and can help prepare platforms for eventual exits.

Gallani highlighted just how fragmented the fibre space still is, pointing to at least 40 to 50 viable M&A targets when combining enterprise and residential platforms.

“If you think 200,000 to 300,000 homes is the right scale,” he said, “there are definitely a lot of fibre companies that are in that range.”

He expects these companies to become increasingly active in the deal market, especially as they look for capital-efficient ways to reach the next phase of growth.

Boyeaux of KKR agreed, adding that fibre’s capital intensity is both a challenge and an opportunity. With many players unable to fund national-scale buildouts alone, strategic partnerships and acquisitions are becoming increasingly attractive.

He also noted that adjacent opportunities, where revenue and cost synergies can be quickly realised, make fibre a particularly compelling consolidation play.

Holder offered a broader strategic view, explaining that the growing emphasis on scale is a natural next step.

“We’re getting closer to the end of the land grab in residential fibre,” he said. “The scale benefits are starting to outweigh some of the organic growth benefits.” That shift, he argued, is contributing to the current uptick in fibre M&A.

With valuation pressures and costs of capital remaining elevated, investors are increasingly turning to more creative deal structures to support and unlock M&A opportunities that might otherwise stall.

According to panellists at Metro Connect, approaches like joint ventures are offering investors new ways to align interests, spread risk, and access deeper pools of capital.

Boyeaux offered a detailed case study: the firm’s 50:50 joint venture with T-Mobile to recapitalise fibre-to-the-home provider MetroNet. The deal transformed the business into a wholesale model, with T-Mobile taking over customer relationships while MetroNet retained responsibility for network operations.

“For us, it was a way to continue backing a team we like in a market we believe in, while bringing in a strategic partner,” Boyeaux explained.

From T-Mobile’s perspective, he said, the joint venture structure was a “capital-efficient way to make big bets off balance sheet”—a key consideration for any publicly listed partner.

“That really supercharges the ability to do deals that are strategic and exciting for them, but in a way that maybe doesn't scare off public shareholders in the same way that a full control transaction,” Boyeaux added.

Holder noted that structured transactions like KKR’s deal with T-Mobile often emerge when traditional deals can’t be executed outright.

“A lot of what we’re seeing with structured deals is to help achieve transactions that may not be achievable otherwise,” he said, adding that identifying the right pocket of capital—whether through preferred equity, minority stakes, or hybrid structures—has become critical in today’s market.

Gallani noted that such joint ventures and creative capital structures are enabling a new class of investors to enter the digital infrastructure space, with pension funds and sovereigns becoming increasingly active players thanks to structures that allow them to manage operational risk while still participating in growth.

“By creating a newco or a greenfield platform,” Gallani said, “developers can offer investors the same target internal rates of return (IRRs) they were able to achieve five years ago, but with more flexible risk profiles.”

These alternative models are also making inroads beyond data centres into markets like fibre.

Gallani observed that while joint ventures and asset carve-outs have long been common in hyperscale data centres, similar approaches are now being used to finance fibre expansion, particularly for operators who want to raise capital without selling control.

DigitalBridge’s Zona rounded off by noting that much of the new, more creative deal structuring comes down to managing capital intensity.

“There are classes of investors that accept it, and classes that don’t,” he said. “The right structure can help keep those doors open.”

Despite the increased cost of borrowing, panellists outlined a debt financing landscape that remains surprisingly healthy and, crucially, disciplined.

With the digital infrastructure sector requiring massive ongoing capital investment, especially in data centres and fibre, a mix of bank debt, private credit, and securitisation is keeping projects moving forward.

Zona, a key figure in the credit space, was quick to push back against the perception that private credit is prohibitively expensive.

“Private credit gets a bad rap in many respects, because people perceive our capital to be too pricey. Our investors have a wide range of return expectations that are aligned with risk, and we love capital intensity.”

Private credit, Zona argued, is often better suited to capital-intensive businesses — especially since it avoids the regulatory and ratings constraints traditional lenders face.

“We don't have a regulator or a rating agency looking over our shoulder. We can help teams meet their strategic goals with the appropriate long-term capital that will allow you to invest in your business.”

Gallani of Societe Generale echoed that sentiment, pointing to what he described as a “very healthy” financing environment across both construction and long-term debt markets.

He noted that the bank loan market, institutional investors, and securitisation channels are functioning well, particularly in data centres, where disciplined structures and pricing are allowing for smooth transitions from bridge loans to long-term placements like asset-backed securities (ABS) or commercial mortgage-backed securities (CMBS).

Gallani emphasised that lenders are not overextending themselves, even amid record demand from hyperscalers.

“The market has been very disciplined,” he said. “Deals are being structured in a way that gives you enough cushion to exit successfully into the capital markets.”

Holder underlined the role of flexible capital formation in supporting organic growth. With high development yields across fibre and data centres, he said, private credit and hybrid structures are enabling borrowers to match capital profiles to investment timelines more effectively — a key driver behind the uptick in both development and M&A.

The panel took place just a few weeks after DeepSeek upended the AI world and made investors question the demand for high-end infrastructure. The message from Metro Connect’s panellists was unequivocal: demand isn’t just holding — it’s accelerating.

Gallani of Societe Generale broke it down with sharp clarity: “DeepSeek didn’t slow things down. If anything, it’s speeding up the shift from traditional language models to more complex reasoning models, and those require exponentially more compute.”

While DeepSeek may have reduced the unit cost of AI inference, the volume of processing is surging. The result? More data, more processing, more infrastructure — not less.

Gallani cited estimates showing reasoning models generating up to 100 times more words than their predecessors, and requiring vast increases in GPU power and data centre capacity.

“We’re not seeing any slowdown,” he said. “If anything, we’ve doubled our pipeline for construction loans tied to hyperscalers. It’s now running at around $20 billion.”

The capital intensity for AI is staggering. Gallani pointed to public filings from the “Big Four” hyperscalers — Google, Amazon, Microsoft and Meta — which show a combined CAPEX run rate of $300 billion annually, projected to rise 45% in the next 18 months.

Even if just a third of that is data centre-related, the implication is clear: infrastructure demand is moving at hyperscale speed.

Zona of DigitalBridge offered a broader frame: “We’re seeing the ‘AI-ification’ of cloud. You don’t need an entirely new product to drive demand — just look at Microsoft Copilot. These enhancements are embedded in existing services, and they’re compute-hungry.”

He reminded the audience that Azure alone is now a $20 billion business growing at over 30%, with 70% margins.

“They could have grown even faster if they had more capacity,” Zona added, quoting Microsoft’s CFO.

KKR’s Boyeaux reinforced the point from the operator's perspective. “We own five data centre businesses globally,” he said. “And we haven’t seen any pullback in demand from large customers.” He listed three drivers: falling unit costs, increasing overall AI usage, geopolitical momentum behind US-built tech infrastructure, and the basic reality of constrained supply.

“Space and power are still scarce,” he said. “If you have them, you contract out fast.”

Hill sounded a note of strategic caution, not bearishness, but awareness of sector history.

“We’ve seen overbuilds in telecom before,” he warned. “You just want to make sure everyone’s building to demand, with anchor tenants and long-term contracts.”

Holder summed up the investment mindset from the big players: “Hyperscalers can’t afford to miss this wave. They’re all in. And the sector benefits, regardless of who wins.”

As AI drives demand for ever more data centre capacity, power availability is fast becoming one of the defining factors in digital infrastructure investment, determining where sites can go and when they can come online.

While not yet a deal-breaker, access to power is beginning to shape both strategy and valuations.

Hill said power constraints aren’t slowing M&A; if anything, they’re adding a premium to well-positioned assets.

“If you’ve got power today, you’re sitting on a scarce resource,” he said. “That enhances M&A possibilities.”

Gallani highlighted a new trend: energy providers and data centre operators forming early-stage partnerships to secure behind-the-meter power solutions before tenants even come to the table.

“You can’t wait until you have a lease signed to start thinking about power,” he warned. “Developers are getting proactive and that’s going to be a competitive advantage going forward.”