Data Centers

/Overview

Nixon Peabody delivers sophisticated legal services to developers, owners, operators, investors, and lenders across the rapidly evolving data center industry. We provide comprehensive support that spans the full data center project lifecycle—from project finance and tax incentives to energy procurement, real estate development, and dispute resolution. Our team is adept at structuring borrowing-base construction revolvers and other flexible credit facilities, as well as negotiating co-location, hyperscale, and build-to-suit development agreements.

We strategically leverage state and local incentives and federal programs to guide clients through complex energy deals, including public power, renewables, and major solar projects. This allows for tax and energy benefits while addressing utility demands and regulatory hurdles that affect siting and delivery. We also advise on intellectual property, data security, international compliance, and dispute resolution to keep developments moving.

Whether developing a multi-site portfolio, entering new markets, or scaling existing operations, Nixon Peabody helps data center owners and operators manage risk, accelerate speed to market, and support long-term sustainable growth.

/Our focus

• Project financing strategies: Data centers require complex and innovative financing to support their development, construction, and expansion. Our attorneys create financing structures that allow flexibility, including during the build-out phase of construction, and facilities that allow multiple projects to be financed under one revolving facility. We represent lenders in drafting innovative financing structures and assist developers in creating, structuring, and negotiating these facilities with various lenders.
• Tax Incentives: Government support for data center development is driving new opportunities for growth and investment. We help clients finance and secure tax incentives for data centers, enabling innovation and economic growth across the US. Our experience includes negotiating and structuring state and local tax incentives and federal new markets tax credits to fund the development of data centers.
• Real Estate Development and Construction Contracts: Developers and investors can unlock the potential of the data center market with our experience in real estate, environmental, land use, permitting, site control, construction contracts, and litigation. We help you navigate these challenges as the ideal partner for your data center development, ensuring a smooth, successful project from start to finish.
• Data Center Leasing: By integrating multiple practices on data center leasing transactions, we bridge the gaps across real estate, power and connectivity, and federal, state, and local regulations affecting data center procurement, siting, development, and operation. We structure hyperscale, wholesale, and colocation leases to navigate everything from site selection and build-to-suit development to the negotiation of mission-critical SLAs that align with high-density cooling and power redundancy requirements, while promoting sustainable energy integration for future-ready infrastructure.
• Energy: We have deep experience in energy transactions, public power, offloading agreements, EPC, and project financing. With a strong track record in solar and renewable energy—for example, a major utility-scale solar project in the US Virgin Islands—our guidance will help power your next project with innovative, sustainable solutions.
• Security: Due to the sensitive information they store and transmit, data centers need enhanced security measures to prevent insider threats and cyber-attacks. Our national security professionals can guide you through strategies to address vulnerabilities, enhance security, and minimize legal liabilities.
• Intellectual Property: Data centers must navigate IP challenges ranging from licensing and competitive IP assertions to data security and international regulations. Our IP attorneys protect innovations and mitigate risk through intellectual property procurement, litigation, and IP enforcement. We represent both data center operators and suppliers of data center technologies, such as cooling and power distribution equipment and advanced control software. Our team understands the technologies involved, simplifies complex issues, assists with on-site inspections, and leverages global resources for comprehensive support.
• Dispute Resolution and Litigation: Data center projects face an increasing number of challenges from governmental entities and private plaintiff class actions. Lawsuits can involve environmental protection statutes, nuisance theories, state consumer protection acts, and claims regarding impact on property values, energy costs, and tax revenues. We resolve threatened or actual litigation in an efficient and cost-effective manner.
• Artificial Intelligence and Cloud Infrastructure: The convergence of AI workloads and cloud computing is driving unprecedented demand for data center capacity. We advise clients on the legal, regulatory, and contractual frameworks governing AI-ready infrastructure, including GPU cluster deployments, high-performance computing agreements, and the unique power and cooling requirements of AI training and inference facilities.
• Environmental, Sustainability, and Community Relations: Data center developers face increasing scrutiny over water usage, carbon emissions, noise, and community impact. We counsel clients on environmental compliance, sustainability commitments, community benefit agreements, and ESG (environmental, social, and corporate governance) reporting obligations to help secure social licenses and regulatory approval for new projects.