With a global investment value at $59bn (£47bn~), and a global deal volume of 91, 2022 marked a record year for data centre investment.

After looking at data sourced from the Inframation platform, Linklaters’ experts have found that deal value and volume levels look to be in line with what was seen last year.

While there’s been economic headwinds and a slowdown of deals generally, the law firm’s findings highlight the importance of data centres amid the continued adoption and advancement of technologies, not least artificial intelligence.

David Martin, partner and co-head of Linklaters’ digital infrastructure offering, said: “Our research has underlined the popularity and critical nature of data centres and this trend is building momentum.

“One recurring theme throughout the data is the role of financial sponsors who have always been attracted to data centres due the increasing criticality of digital infrastructure and strong financial returns.

“Looking to the remainder of 2023 and into 2024, we are at an interesting junction as many of the data centres are coming to the end of their five-to-seven-year cycle.

“We should expect to see increasingly high volumes of deal activity within this space as strong macro trends, including cloud computing and AI continue and sponsors look to spin out assets or sell off shares to stabilise and attract new investors.”

The law firm found that, as of 30 September 2023, $80bn (£64bn~) has been invested in the global digital infrastructure sector, with $16bn (£12bn~) being invested in data centre-related deals.

According to Linklaters, data centre-related deals have consistently grown over the last few years, with a compounded annual growth of 32% from 2017 to 2022.

In particular, Europe has seen the largest number of data centre deals both last year and so far this year, the law firm found. Also, that it’s seen its share in data centre transaction value rise from 6% in 2022 to 36% in 2023.

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Speaking on data centre investment, AI, and Europe, Julian Cunningham-Day, partner and co-head of Linklaters’ digital infrastructure offering, commented: “The increasing adoption of AI and cloud services is making data storage ever more critical while the proliferation of IoT devices and streaming services is driving demand for edge data centres.

“Many national governments have backed the development of the sector and encouraged record levels of investment, which is one of the key drivers behind the continued resilience and levels of investment in Europe, despite the challenging market conditions which have impacted M&A in some sectors.”