Data Centers

We are immersed in the AI sector and work closely with innovators at the cutting edge of technology. In doing so, we regularly advise companies in all sectors as they look to take advantage of the opportunities associated with adopting AI into their businesses, while guarding against the risks that arise. In addition, we advise policymakers and regulatory agencies as they consider how best to adapt and develop the laws that will govern the safe use of AI around the world.

We have extensive international expertise in multifaceted commercial, contractual, data privacy, IP, competition/antitrust, regulatory, policy and other legal challenges affecting companies as they adopt and develop AI solutions for their businesses, whether as the providers or users of this technology, all of which is generating significant increases in demand for data center capacity. With a diverse mix of capabilities and experience gained in the worlds of business, policy, law and tech, our multidisciplinary team has the resources, insight and business-minded, pragmatic skillsets to help clients navigate the most pressing challenges and risks, make fast and effective decisions, develop new business models and, most importantly, thrive.

We have substantial expertise in advising data center operators on the implementation of all the IT systems that are required to deliver increasingly complex services to their customers. In addition, we advise many of our clients who are contracting with data center providers regarding the deployment and use of all manner of cloud-based IT systems, cloud services, data hosting, storage solutions and managed services. In so doing, our work spans complex, high-value arrangements involving Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS) offerings, hyperscale environments, edge and distributed computing, as well as business-critical platform outsourcing.

In addition, we have extensive experience advising data providers and the organizations that rely on them, whether contracting directly with data vendors or operating within intricate, multiparty data supply chains. Here, we help clients structure, negotiate and operationalize cloud and data arrangements that balance performance, resilience, security, regulatory expectations and commercial risk, enabling them to scale effectively and innovate with confidence.

We provide advice on a wide range of matters related to cybersecurity risk, including but not limited to, advising clients on their options and obligations in responding to ransomware attacks, personal data breaches, inadvertent disclosures and phishing emails, etc.; interfacing with law enforcement agencies, regulators, data protection authorities, law enforcement authorities and insurers; coordinating and making appropriate breach notifications to data subjects and data protection authorities; coordinating crisis management response and litigating any matters arising out of such incidents. We also work with technical security professionals to assess our clients’ cybersecurity profiles. When vulnerabilities are found, we work with management teams, vendors, PR and other consultants and third parties to design, implement and train employees on newly developed cybersecurity compliance programs. Finally, we advise on due diligence for third-party service providers, mergers, acquisitions and joint ventures.

Legal frameworks, regulatory expectations, litigation risks and policymaking continue to evolve in all jurisdictions across the world. We offer a fully integrated service across all legal, regulatory, policy and legislative developments that impact on the collection, commercialization, storage and international transfer and sharing of data.

All businesses are using digital technology to transform their operations, models and customer experiences. In so doing, AI is being integrated into core functions like product development, smart manufacturing and supply chain management, as well as marketing, sales and customer experiences. In so doing, we are advising our clients as they move beyond simple digitization to become data-driven, customer-centric and agile in their response to market changes, while leveraging automation, AI and online platforms and services.

In this area, we are advising our clients on the digitization of their products and services alongside the creation and commercialization of entirely new digital assets on a global basis, while minimizing the risk and maximizing the opportunities. We specialize in complex, high-value domestic and international transactions involving the internet and digital assets which are, in turn, increasingly reliant on robust, secure and scalable data center services.

Antitrust risks include concerns about collusion and anticompetitive agreements, particularly “no-poach” deals among companies for workforce in the data center construction sector. The exchange of competitively sensitive information, such as pricing and customer data, is also a significant risk. Additionally, regulatory bodies are scrutinizing the potential for abuse of market dominance by large hyperscaler data center providers, and how their rapid expansion and high demand for resources like electricity could stifle competition or harm consumers. Regulatory risks include noncompliance with sector-specific rules aimed at protecting security and promoting switching between providers, such as for example the Network and Information Security Directive (NIS2) Directive and Data Act in Europe. Finally, as the data centers sector moves towards consolidation, strategic partnerships and cross-minority investments, our team can help navigate increased scrutiny under global merger control rules.

Our Construction & Engineering team assist owners, developers and operators of data centers, as well as those in the supply chain and funders with unique challenges, which data center projects give rise to, including uninterruptible power supply (UPS), cooling solutions, building management services (BMS), fire safety and security. This ranges from procurement advice and split of packages like civils works, built environment, UPS arrangements, cooling/heating, ventilation and air conditioning (HVAC), as well as engineering arrangements and use of modular approaches and interface with key supply contracts and critical testing and commissioning regimes. We also cover operation and maintenance agreements.

We negotiate the various contracts, as well as ensure compliance with local regulations and flow down of service level agreements (SLAs). We also provide a “whole life service,” including managing any claims or disputes involving project delays, cost overruns or defective work. Our team provides the framework to help clients to protect their investments and mitigate risks.

New hyperscale projects often involve different investors and debt and equity requirements, as well as overall corporate and tax structuring advice, including the use of Operating Company (OPCO) and Property Company (PROPCO) arrangements. Our team also advises on material, high value M&A work in this fast-moving sector to facilitate investment and secure exits for sponsors.

Energy intensive users are increasingly in need of available, reliable, sustainable and cost-effective power solutions, and data centers are no exception. With increasing demands on existing grid infrastructure, developers are having to turn to on-site electricity generation and private wire arrangements to secure an uninterrupted power supply, and overcome delays caused by the need for network reinforcement. We help our clients navigate the evolving regulatory regime governing electricity generation projects and large-scale demand sites to ensure the security of supply and effective carbon footprint management, while reducing their exposure to volatile energy markets, use of system charges and end-user levies.

Our work addresses the bankability requirements specific to data center assets, including power availability and resilience, long-term land arrangements, cooling and equipment procurement, fiber connectivity, redundancy and service-level obligations.

We structure financings that align capital deployment with technical and commercial delivery milestones, including phased buildouts, modular rollout strategies, capacity-reservation arrangements and tiered commissioning tied to resilience and performance testing. Our experience spans senior secured lending, development finance, platform-level capital solutions, hybrid debt and equity structures, private-credit investment and long-term capacity-backed arrangements. We also advise on sustainability-linked financings, clean-power procurement, Islamic financing structures and both holding company and asset-level facilities.

We regularly help clients set up direct investment and joint venture projects designed to scale. This includes putting in place practical governance arrangements, clear investor alignment and sensible funding, as well as distribution mechanics. We also advise on the tax and regulatory questions that come with cross-border structures. Our finance and infrastructure teams work with cross-practice teams to ensure the capital structure matches the realities of delivery – power, construction, commissioning and long-term operations – so a project can deliver in a stable and sustainable way.

We are at the forefront of the strategic people agenda, supporting company boards, HR leaders and in-house legal teams around the world as markets continue to deal with global geopolitical issues and trends, such as environmental, social and governance (ESG), pay equity, whistleblowing and AI.

We design workforce systems, processes and procedures to address the evolving regional and international labor and employment legal compliance requirements that our clients face. We help multinational companies implement business-driven changes across their global workforce, and develop commercially driven and lawful compensation, incentive arrangements and benefit plans, as well as policies to enable them to recruit, manage and retain high-performing and diverse global talent.

Our team is trusted to advise on the issues that matter to key stakeholders; whether global or jurisdiction specific, featuring time-sensitive changes that need to be implemented, sensitive complaints that must be investigated, high-stakes claims that must be smartly defended, risks that needs to be mitigated and potential new laws that need to be influenced. Regular examples include advising clients on restrictive covenants and trade secrets, global mobility and business immigration, liability prevention and counseling, litigation, sensitive and complex investigations (regularly working alongside our Government Investigations & White Collar team), equal opportunity and discrimination, executive matters (including contract preparation, incentive plans and sensitive exits), reorganizations and restructuring, wage and hour issues, union and labor relations, government contracting compliance, M&A and corporate changes, as well as workplace safety.

Data centers are critical to digital economies, as the development of AI capabilities raise novel issues about access to data. In this context, investments directly or indirectly in existing or new data center operations often implicate mandatory or voluntary filings before local authorities that screen, prohibit or regulate investments on public interest or national security grounds (commonly referred to as FDI screening regimes). Our team is uniquely suited to provide a one-stop shop to assess and manage FDI control filing risks globally, such as filings with the Committee on Foreign Investment in the US (CFIUS), the National Security and Investment (NSI) Act in the UK or the national FDI and NSI control regimes in the EU. Our team in the US, for example, has a long history of representing data center investments before CFIUS, including one of the few presidential reviews stemming from the CFIUS process. Our FDI experience globally is complimented by a robust policy team of former government officials that can offer unique insights and additional strategic options to clients.

As we enter a new era of investment in data center infrastructure, driven by rapid advances in AI, the proliferation of high-performance computing and the demand for secure and resilient digital infrastructure. Federal initiatives such as the CHIPS and Science Act, as well as programs led by the Departments of Energy and Commerce are reshaping the US’ digital foundation. Access to federal support increasingly depends on meeting standards for energy efficiency, cybersecurity resilience and geographic diversification. Our firm helps clients position their projects to align with these evolving priorities and capture the benefits of available federal incentives.

At the federal level, agencies such as the Departments of Energy and Commerce are setting the direction for advanced computing and critical digital infrastructure. The Department of Energy’s energy-efficiency and grid-modernization programs increasingly intersect with data center development, while the Department of Commerce’s Bureau of Industry and Security (BIS) administers export controls affecting advanced semiconductors and AI systems. Moreover, environmental review under the National Environmental Policy Act (NEPA) applies when federal funding or approvals are involved, and an expanding cybersecurity and privacy framework adds additional compliance demands. We guide clients through these interlocking federal requirements, ensuring their projects align with applicable programs and policy objectives.

At the state and local level, governments play an equally decisive role. Some states, such as Virginia, Texas and Arizona have become leading data center hubs through targeted tax exemptions, streamlined permitting and infrastructure investment, while others, including California and New York, apply more stringent environmental and energy standards that influence cost and feasibility. Our team works with clients to assess jurisdictional competitiveness, secure incentive packages and engage effectively with governors’ offices, utilities and development agencies to achieve timely approvals and favorable outcomes.

One of our specialties is looking after clients whose ownership and management of their property or new developments is not their core business through devising bespoke occupier strategies based on clients’ individual portfolio requirements. We help to streamline site development, mitigate costly delays and establish data centers that meet the industry’s demanding operational and scalability needs. We also advise on colocation agreements and associated SLAs, as well as planning and permitting where new sites and developments are being built.