AI Infrastructure Entering A New Phase: Key Insights from Metro Connect USA 2026

What is the state of the U.S. digital infrastructure market in 2026? Ropes & Gray participated in Metro Connect USA, the largest digital infrastructure conference in the United States. Meeting in Fort Lauderdale, Florida, on February 23–25, senior dealmakers, investors, and other key stakeholders representing a range of sectors including data centers, broadband, and more gathered to discuss M&A, capital formation, and the latest developments in AI’s impact in this space. The conference made clear that AI is no longer merely a looming change on the horizon—it is an operating reality that is taking root across the entire digital infrastructure ecosystem. Here are some key takeaways from the conference.

AI's Impact Is Broadening Across the Digital Infrastructure Ecosystem

• AI is entering a second phase with implications well beyond data centers. While early investment concentrated on hyperscale facilities, downstream effects are now cascading across the ecosystem—from fiber routes to enterprise connectivity to retail colocation. Ropes & Gray has taken a leading role in this expansion, advising Temasek on its anchor investment in the Artificial Intelligence Infrastructure Partnership (“AIP”), founded by BlackRock’s Global Infrastructure Partners, MGX, Microsoft and NVIDIA. As AI workloads broaden into inference, healthcare, and back-office automation, bandwidth demand will accelerate across sectors.
• Today's buildout is fundamentally different from the dot-com era. Unlike twenty-five years ago, when long-haul routes were built speculatively and without committed customers, today's infrastructure is being built for tenants with clear use cases and firm activation timelines. Funding is based on operating cash flow rather than speculative equity, and sourced from sophisticated private capital providers.

Capital Structures Are Evolving

• Structured equity is gaining traction as a de-risking tool. Investors are increasingly using preferred shares with liquidation preferences to create more predictable exit profiles. Structured equity allows capital providers to participate in high-growth assets while managing downside risk.
• Joint ventures remain a critical vehicle for public company participation. JVs allow public companies to participate in capital-intensive hyperscale data center development without straining their balance sheets, pairing long-duration capital with operational expertise. Market participants expect these structures to persist for years as the buildout continues. There remain, however, open questions regarding the ultimate ownership of the stabilized assets and whether there will be a push for the public markets to ultimately assume full ownership of built and stabilized assets.
• The ABS market has expanded significantly. The scope of digital infrastructure assets covered by the asset-backed securities (ABS) market has grown tremendously over the past five years. ABS provides a compelling blend of high leverage, low cost of capital, and portability in the event of a sale or change of control. ABS issuances are secured by fiber-to-the-home, wholesale, and enterprise assets rather than hyperscaler contracts. Ropes & Gray, for example, recently advised Altice USA on a first-of-a-kind $1 billion asset-backed term loan facility, which marked a milestone in infrastructure-backed financing by securitizing the receivables generated by the company’s Bronx and Brooklyn service area and the related hybrid-fiber coaxial (HFC) network assets.
• Private credit is part of the solution. Panelists across sessions emphasized that private credit will need to complement both ABS and traditional bank financing to meet unprecedented capital requirements in digital infrastructure.

• Investors are repricing liquidity and duration. Two fundamentals—liquidity and duration—are becoming more expensive to underwrite. Investors must now carefully evaluate the type and timing of liquidity they will receive over five-, seven-, and twelve-year horizons, which directly affects valuations and the willingness to take long-dated risk.

Fiber Trends

• Scale and reach are driving M&A. Fiber consolidation was a dominant theme, with operators and investors agreeing that scale matters more than ever. M&A is the most efficient path to achieve geographic reach, operational efficiencies, and access to more sophisticated financing structures.
• Enterprise fiber is seeing renewed momentum. Enterprise fiber, long considered a slower-growth segment, is beginning to benefit from AI-driven demand as customers seek redundancy and direct data center connectivity. Hyperscalers are also building their own enterprise-grade fiber, a development that incumbent operators are watching closely.
• BEAD is a transformative but experimental initiative. The federal Broadband Equity Access and Deployment program drew significant attention, with panelists describing divergent state-by-state approaches using varying mixes of fiber, fixed wireless, and satellite.

• Private capital alone cannot close the digital divide. Panelists acknowledged that building in economically marginal areas requires government intervention, whether through subsidies, open-access mandates, or other regulatory frameworks. Canada's recent move to open-access fiber was cited as a model worth watching.

Data Centers: Investor Focus Intensifies and Power Infrastructure Remains the Binding Constraint

• Data centers command the lion's share of capital and attention. Panelists described a market where it is hard not to focus on data centers given the scale of the opportunity. Growth-oriented, investment-grade data center assets continue to attract capital across the risk spectrum, from structured equity and private credit to public market vehicles. Reflecting this, Ropes & Gray recently advised GI Partners on a single-asset continuation vehicle and a strategic investment in Flexential, a leading provider of secure and flexible data center solutions. 

• Power availability determines follow-on demand. Where power is accessible, data center sites tend to attract follow-on tenants quickly after an anchor customer commits, making power access a self-reinforcing locational advantage. As data centers are increasingly built in more remote locations, identifying growth corridors for AI—and concentrating assets in those geographies—has become a strategic imperative. Panelists commented that they have seen an uptick in so-called “behind the meter” power generation solutions, and continuing on themes from prior years, there was continued emphasis that power transmission constraints are a primary driver of constraints on available power.

• An "all of the above" approach to power is taking shape. The Department of Energy is pursuing a diversified strategy to meet surging demand, with power solutions expected to be highly geographical. One power source that was heavily discussed was nuclear power; nuclear power plants that are already in existence are increasing their power output where possible.

• Community engagement is essential. Opposition to new power and data center facilities is intensifying, and effective stakeholder management—engaging communities, regulators, and local governments early—is becoming a prerequisite for project execution.

Fundraising and the Road Ahead

• Fundraising is tight despite strong investor interest. Delayed exits and lower distributions have created a liquidity crunch, constraining the ability of limited partners to recycle capital. Fund managers are responding by broadening distribution channels into 401(k) plans, annuities, insurance products, and other non-traditional access points for private infrastructure assets.
• A return to public markets may be on the horizon. Several panelists expressed optimism that listed markets will play a larger role for digital infrastructure assets, noting the minimal exposure of the U.S. REIT market to the sector. Take-privates could reverse course, with re-listings becoming significant as early as 2027.
• Minority-stake M&A and de-levering will continue. Panelists expect minority-stake transactions to help data center and fiber platforms reduce debt, extend liquidity to early investors, and prepare balance sheets for eventual IPOs.
• The convergence of fixed and wireless networks is underway. While the investment thesis is still developing, panelists flagged the ongoing convergence of wireline and wireless as an emerging area of potential value creation, with telecommunications companies increasingly at the center of that dynamic.
• Investor sentiment remains growth-oriented. The market is actively deciding which subsectors are most mature and ready for capital deployment. Fiber-to-the-home continues to attract interest, though investors remain cautious about downside risk. Data centers are viewed as offering the most immediate investment-grade opportunities, with enterprise fiber positioned for accelerating growth in the years ahead.

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