In our 2027 Data Center Market Outlook, drawing on surveys of nearly 500 senior executives across the US, Europe, and the Middle East, not a single respondent said M&A activity was "not on the horizon." In fact, 85% stated they are likely to participate in carve-out or sale-leaseback transactions within the next two years. 

Three questions will determine how M&A activity shapes this market: How fast do deals happen, who moves first, and which assets will actually find buyers?

Telcos are cashing out, but the exit is harder than it looks

The single most anticipated driver of M&A activity is telco monetisation of datacentre assets, cited by 73% of respondents. In Europe, where deleveraging pressure is most acute, this rises further. 84% in France and 82% in Germany expect telco-driven deal flow to define the next wave of transactions. In the US, the share is lower at 69%, but still significant.

Years of capital-intensive network investment, tightening debt markets, and the rising cost of maintaining legacy infrastructure have pushed datacentres and datacentre-suitable assets (such as emptied central offices) to the front of the strategic agenda. The logic is compelling: These assets can provide a backbone for edge DCs with the rise of physical AI; offloaded DCs can be leased back to generate stable cash flows; they can attract infrastructure capital with diverse structures; and can be separated without disrupting core network operations. 

The problem is that the separation is rarely clean. Respondents named the following as structural barriers to a non-disruptive separation: The complexity of disentangling technical assets, the weight of legacy technology, the capital required for modernisation, and regulatory and anti-trust scrutiny. 

Scale or get acquired

Behind telco monetisation sits operator-on-operator consolidation, cited by 71% of respondents as a major M&A driver. This is the market signaling that smaller standalone operators face capital structure pressure. Operators running facilities below 50MW carry structural disadvantages: limited access to capital and less pricing power than well-capitalised peers. Yet location increasingly overrides scale as the primary value driver; a modern, well-located 20–50MW facility in a supply-constrained market remains a highly attractive asset. The operators most at risk are those that are sub-scale and poorly located, with limited capital to bridge the gap. 

As capital gravitates toward large, power-rich, modern assets, the smallest operators face a choice: Consolidate or be left behind in the next capex cycle. For PE-backed platforms that built portfolios during the 2021-2023 boom on the assumption of perpetual demand growth, that pressure is arriving earlier than expected.

A new asset class is taking shape

Modern datacentres are much more than buildings with servers. They are power procurement platforms, and increasingly, an infrastructure anchor for grid-scale investment. That reframing matters for how deals are structured and how assets are valued.

82% of respondents expect M&A between datacentre operators and energy players within 24 months. As cooling constraints overtake power availability as the top barrier to AI infrastructure scaling, the technical and financial integration of computing and energy is no longer optional. Operators that can manage both sides of that equation will command premium valuations. Those who cannot will find themselves on the wrong side of an accelerating asset quality divide.

Not all assets will find buyers

88% of respondents were explicit: Only select assets will attract buyers. Those with modern technology and a meaningful excess to power capacity will command premiums as older, power-constrained facilities are left behind.

The reason is structural. Facilities built between 2022 and 2024 were engineered for 20–40kW per rack. Next-generation silicon demands multiples of that: NVIDIA's GB200 NVL72, today's benchmark rack-scale AI system, draws approximately 120kW, requires direct liquid cooling, and weighs over a metric ton. Facilities that cannot meet that bar face a different fate: As the workloads they support become increasingly commoditised, their ability to command premium pricing fades.

The strategic implication

For investors and operators, the window to reposition is open, but it will not stay open indefinitely. The cycle forming now will reward those who move with clarity on three questions: 

1. Which assets are genuinely sellable at full value today?
2. Which require operational transformation before they become attractive?
3. Which have already fallen so far behind that the cost of catching up exceeds any realistic return?

The telco carve-out wave, operator consolidation, and emergence of datacentre-energy hybrid assets are three different responses to the same three pressures: Power scarcity, technology obsolescence, and the concentration of capital around assets built for what comes next.

The only strategic variable is whether you are shaping the market as it shifts or responding to it.

Andrej Danis is a Partner and Managing Director at AlixPartners based in New York. Christian Luetkhoff is a Partner at AlixPartners based in Houston. Both advise clients across technology, media, and telecommunications.