Houlihan Lokey Digital Infrastructure Update Q1 2026: deals, valuations and the AI capacity race

The report's market section puts infrastructure fundraising in Q1 2026 at $26.4 billion, the second-lowest Q1 total in six years. Houlihan Lokey links part of the dip to fund closes pulled into late 2025, which inflated that year's record total. The pipeline is still large. Funds in the market are targeting more than $410 billion, and the five largest account for over $70 billion of that. Investors also leaned toward higher-risk strategies, with value-add and core-plus funds drawing nearly two-thirds of first-quarter capital. The update follows the bank's earlier quarterly editions and sits alongside a separate Houlihan Lokey view that data center development was a main driver of nonresidential construction in Q1 2026. The bank says about 40 of its professionals cover digital infrastructure across the United States and Europe, so its deal list reflects both markets. For AI founders, the figures show where capacity funding is coming from. Slower closes in one quarter have not shrunk the capital waiting to be deployed, and several large funds are expected to close later in 2026. Companies that depend on leased compute or colocation should expect financing to favor riskier, growth-oriented projects, which may affect pricing and delivery timelines.