January 12, 2026 | By: Kevin Burke, Managing Director, Digital Infrastructure Financial Advisory Lead

Digital infrastructure continues to shape some of the most important trends in today’s economy. From AI-driven compute demand to evolving broadband economics, regulatory reform, and unprecedented capital deployment, investors are navigating a market that is expanding rapidly while becoming materially more complex.

Against this backdrop, Leo Berwick, together with Morgan Lewis, Bank Street, and TVG, recently hosted an Investing in Digital Infrastructure Masterclass in New York. Designed as a practical, sector-focused session for experienced investors, the discussion explored how market dynamics, policy initiatives, and deal execution considerations are reshaping investment decisions across fiber and broadband, data centers and power, and towers and wireless infrastructure.

The panel brought together integrated, sector-dedicated advisor perspectives, including Kevin Burke and Tania Wang (Leo Berwick), Andy Lipman and Mike Muller (Morgan Lewis), Rich Lukaj (Bank Street), and Ed Vilandrie (TVG). Their insights offered a multidimensional view of how capital is being deployed today and what will differentiate successful investors in the next phase of digital infrastructure investing.

From “Land Grab” to Granular Digital Infrastructure Investing

One of the clearest themes to emerge was the end of the early “land grab” mindset. While growth remains strong, today’s market increasingly rewards precision, specialization, and bottom-up analysis.

Lukaj explained, “This is a market where subtle regulatory shifts can make or break a specific geography, and where each business model and investment segment has its own economics that can dramatically affect outcomes.” Rather than assuming uniform conditions, investors must understand where value is created, how markets are performing, and which competitive, regulatory, or cost-related levers can materially impact results.

From a financial diligence perspective, Burke reinforced the need for a tailored approach: “High-growth, capital-intensive digital infrastructure businesses require finance due diligence that reflects their unique dynamics. These businesses can experience notable change and growth over short periods, even between diligence and closing, which means investors must go beyond traditional metrics and understand what truly drives cash flow and value in each asset and investment opportunity.”

Government Funding, BEAD, and the Policy Tailwinds Ahead

Public policy is playing a larger role than ever across digital infrastructure, particularly in fiber and broadband. Federal, state, and local initiatives are broadly aligned, creating tailwinds, but also introducing execution risk.

Lipman noted, “There’s nothing like the $65 billion in the infrastructure bill to get the industry’s attention, it’s the telecom equivalent of an open bar.” Of that total, $43 billion is earmarked for the BEAD program, now deep into the planning and application process.

Importantly, panelists emphasized that government funding should be treated as one input, not the investment thesis itself. Investors who succeed carefully assess compliance obligations, funding conditions, reporting requirements, and execution timelines to ensure public capital complements, rather than distorts, underlying business fundamentals.

Tax, Structuring, and Regulatory Strategy as Competitive Advantage

With increasing global capital flowing into digital infrastructure, tax, structuring, and regulatory considerations are shaping deal competitiveness earlier in the process.

Wang emphasized, “It allows investors to anticipate issues, optimize returns, and mitigate risk before signing.” She noted that REIT structures, FIRPTA rules, foreign-investment considerations, and bonus depreciation can all materially impact after-tax returns, deal timing, and overall competitiveness.

Regulatory strategy itself is also becoming a differentiator. Lipman noted that the current environment offers a favorable antitrust backdrop, faster review timelines, and fewer second requests for many transactions. Strategic engagement in regulatory processes, including with the FCC, Team Telecom, and CFIUS, can meaningfully reduce delays and help investors turn regulatory insight into a practical advantage.

Fiber and Broadband: Fragmentation and Consolidation Opportunities

Despite years of build activity, the U.S. fiber-to-the-home market remains highly fragmented. Ed Vilandrie noted that roughly 1,300 providers serve 25,000 or fewer passings.

“Consolidation is inevitable, and it is going to keep management and transaction teams extremely busy,” he said. Major network operators are already consolidating the space, and we are starting to see the playbook emerge for what drives value. This includes operational execution, market positioning, and scale. At the same time, execution quality is becoming a key differentiator. “No two fiber-to-the-home providers are created equal. Investors have to look closely at how a team is performing and executing.”

Advances in AI-enabled data and analytics now allow investors to track activations, market share, and operating performance, including live daily metrics. This insight comes earlier in the diligence process, enabling more informed commercial assessments and valuation decisions even before formal access to a business.

Burke emphasized a dual-lens approach to diligence and valuation. Teams should separately evaluate the mature, stabilized portions of a business and the quality of it’s recurring cash flows, while also analyzing growth opportunities such as new builds and market expansion. This approach clarifies both the underlying value and the upside potential.

The Data Center Supercycle: Power, Scale, and Complexity

Data centers continue to be one of the most dynamic and complex segments of digital infrastructure. These assets are increasingly defined by scale, long-term horizons, and deep interdependencies across power, utilities, fiber, and permitting.

Muller observed, “there has clearly been movement from regulatory headwinds toward potential tailwinds for data center development.” Recent FERC adjustments and evolving power frameworks are helping ease historical constraints, improving timelines for dedicated generation and grid connectivity.

The panelists emphasized that hyperscale facilities often involve billion-dollar investments designed to operate for 20 to 30 years. Financing these projects requires certainty around site control, lease agreements, counterparty quality, power availability, permitting, and redundancy, making precision in diligence essential.

While multi-billion-dollar greenfield project finance deals may grab headlines, Lukaj noted that the data center sector is far from homogeneous. Risk and reward differs sharply between project finance and real data center service providers. Hyperscale facilities carry lower commercial risk when backed by strong contracts, making uninterrupted execution the key operational challenge. Interconnectivity assets have grown in value as demand for high-inertia, interconnected environments rises. The commercial and enterprise segment is evolving rapidly with AI and hybrid IT, creating a large and expanding opportunity set. Across all segments, successful underwriting requires proactively managing key variables to avoid early surprises.

The Rise of the Integrated Deal Team

Across subsectors, panelists consistently highlighted the importance of integrated deal teams. Financial, tax, legal, regulatory, commercial, and technical perspectives increasingly must work together from day one.

As complexity rises, investors who coordinate across disciplines move faster, bid with greater confidence, and avoid late-stage surprises that can derail execution.

What This Means for Investors

The themes from the masterclass point to a digital infrastructure market that is expanding but also diverging. AI-driven demand, regulatory change, public funding, and power constraints are reshaping where value is created and how risk must be managed.

The next phase of digital infrastructure investing will reward granular underwriting over broad narratives and disciplined execution in capital-intensive environments. Opportunity remains abundant, but precision is now increasingly essential.

Continuing the Conversation

The Investing in Digital Infrastructure Masterclass reinforced that success in today’s market requires more than capital. It requires insight, coordination, and execution across disciplines.

Connect with a member of the Leo Berwick team and the other panelists to continue the conversation or discuss how these insights may apply to an upcoming transaction.