Data center deals hit record $61 billion in 2025 as AI valuation risks and funding concerns grip investors

Core Insights - The data center market has seen over $61 billion in investment this year, a slight increase from $60.8 billion last year, amidst a "global construction frenzy" [1] - Dealmaking in global data centers has reached a record high, driven by the need for infrastructure to support energy-intensive AI workloads, with a notable increase in debt financing from private equity markets [2] - Concerns about inflated AI valuations and the sustainability of data center financing have emerged, leading to a sell-off in global stocks [1][2] Company-Specific Developments - Oracle's shares dropped 5% following reports of Blue Owl Capital withdrawing from a $10 billion data center deal in Michigan, impacting other tech stocks like Broadcom, Nvidia, and AMD [3] - Despite the recent stock pullback, analysts, including those from S&P Global, expect that market concerns regarding AI and Oracle will be temporary and will not significantly affect data center development and M&A activities in the near term [4] Market Trends - There have been over 100 data center transactions in the first 11 months of the year, surpassing the total deal value for all of 2024, with the majority occurring in the U.S. and the Asia-Pacific region [6] - The competitive landscape among AI model providers is rapidly changing, which may influence investor sentiment in public markets, but demand for AI applications is projected to continue growing strongly through 2026 [4]