Private Equity Finds a New Way to Bet on AI: Data Center Services

Private equity firms are finding a new pool of potential buyout targets in the fragmented network of contractors and service providers supporting the U.S. data center buildout, as surging AI infrastructure spending creates opportunities for platform acquisitions and consolidation.

A new report from FMI Consulting identifies seven data center service verticals as potential private equity platform opportunities, including electrical and mechanical contractors, operations and maintenance providers, equipment distributors, engineering firms, commissioning companies and building management and data center infrastructure management integrators.

The opportunity is being driven by rapid expansion in U.S. data-center construction.

Spending rose from $9.9 billion in 2021 to $49.7 billion in 2025 and is projected to reach $100.8 billion by 2030, representing a 15.8% compound annual growth rate, according to FMI. The firm estimates roughly $397 billion of cumulative construction spending over the next five years.

A Fragmented Buy-And-Build Market

For buyout firms, the attraction isn’t simply the size of the data center buildout. FMI points to a fragmented ecosystem of specialized service providers, many of which remain founder-owned and lack institutional backing.

Many potential targets generate between $10 million and $100 million of annual revenue, according to the report. In electrical services alone, FMI estimates there are hundreds of lower-middle-market companies generating $5 million to $15 million in EBITDA without institutional ownership.

That creates a potential buy-and-build strategy for sponsors: acquire a regional platform and pursue smaller add-on acquisitions as data center construction expands into new markets.

Around 60% of new data center activity is now occurring outside traditional hubs, with Texas, Arizona, Georgia, Ohio and Pennsylvania among the markets absorbing new investment, FMI said.

Recurring Revenue, Deal Activity

Operations and maintenance businesses could offer potential buyers exposure to recurring revenue through multiyear contracts. FMI said O&M providers commonly operate under master service agreements lasting three to seven years, covering generators, UPS systems, electrical infrastructure and cooling systems.

Recent transactions show interest in specialized businesses tied to the sector.

FMI highlighted Primoris’ acquisition of PayneCrest Electric in March 2026, Milton Street Capital’s acquisition of Safe Air Technologies in May 2026 and Vertiv’s approximately $1 billion acquisition of PurgeRite in November 2025.

The transactions span electrical services and air-quality and cooling-related businesses, illustrating the range of specialized companies that can become acquisition targets as data centers require increasingly complex infrastructure.

Risks Behind the Opportunity

The opportunity comes with challenges. FMI identified labor shortages as a major constraint, particularly for specialized electricians, liquid-cooling technicians, testing professionals and controls specialists.

Customer concentration is another risk, with early-stage platforms potentially dependent on one or two major hyperscaler relationships. Supply-chain issues and tariffs affecting electrical and cooling equipment could also weigh on the sector, while rapid changes in cooling technology could create risks for companies investing heavily in a particular solution.

Still, the combination of a fragmented service-provider market and an estimated $397 billion of U.S. data center construction spending over the next five years could give private equity sponsors a large pool of potential targets as the AI infrastructure buildout continues.

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