Data Centers

In recent years, the exponential growth of artificial intelligence and cloud computing has driven unprecedented levels of investment in the data center industry. As these technologies continue to evolve, the demand for digital infrastructure has surged with data centers serving as the backbone for data-driven innovation.

As the #1 advisor globally by data center transaction volume (Infralogic 2024), we have advised on over $275 billion in data center transactions since 2018 and are unparalleled in our understanding of the market.  

Our data center practice includes lawyers across digital infrastructure, real estate and many other relevant practice areas, which allows us to provide full-service advice to data center owners, operators and investors with a coordinated, multidisciplinary approach. Combining leading market knowledge with novel execution for the diverse participants in this sector, Simpson Thacher offers the tailored advice needed to handle our clients’ most important and complex matters.

We have significant experience in transactions across the full lifecycle of a data center investment—from development to stabilization and optimization, as well as financings, acquisitions and dispositions—which enables us to serve as a one-stop advisor to our data center clients. In an evolving landscape, our Firm excels in offering innovative solutions to address the most challenging issues.

• M&A and Equity Investments: We have acted as counsel to numerous operators and investors in respect of a variety of data center acquisitions, dispositions and equity investments, including:
• Platform acquisitions
• Joint ventures and recapitalizations, including DevCos, YieldCos and programmatic ventures
• Equity investments in data centers and other adjacent areas (e.g., GPUs), including bespoke preferred equity arrangements
• Traditional real estate acquisitions and dispositions
• Pre-Development, Development and Stabilized Financing: We counsel lenders and borrowers on a wide range of complex financing transactions throughout the investment lifecycle. In addition to financing of colocation facilities and powered shells, we have advised on financings of data centers leased to all major hyperscalers, giving us unique insight into the market for hyperscale leases. We specialize in structuring and executing financings tailored to the unique needs of data center operators, optimizing terms to align with their strategic and operational objectives. Our financing experience includes:
• Project finance loans
• Real estate construction loans and balance sheet financings
• CMBS, ABS and US private placement (including the first ever data center ABS and USPP transactions)
• Corporate facilities (including term loans, revolvers, bridge loans, hybrid facilities and NAV/holdco loans)
• DevCo facilities and pre-development loans
• Energy & Infrastructure: As the data center industry continues to expand and power demand surges due to artificial intelligence and other breakthrough technologies, operators are increasingly faced with the challenge of securing the power necessary to meet their rapidly growing energy needs. Recognizing the significance of these challenges, we stand at the forefront of developments in the energy and infrastructure sector, providing clients with guidance through changes in regulatory and market conditions that impact their businesses. We provide innovative solutions to help clients build, commercialize, invest in and operate the data centers and energy infrastructure underpinning this technological revolution. We are leading advisors in next-generation alternative, renewable, solar and storage projects, conventional power and reliable grid assets supplying the electricity that is essential to meet the rapidly growing consumption of data centers.

• Fund Formation: We have advised numerous fund sponsors on the establishment of their data center- and digital infrastructure-focused funds and vehicles.

Since 2018, our team has advised on over $275 billion in data center transactions, including the following notable transactions: