The Scoop
Lenders are feeling maxed out on data-center debt.
When Volta, an AI infrastructure company, went out recently to raise $5 billion for a data center in Norway, the deal didn’t seem that different from the more than $450 billion in AI-related debt deals done so far this year.
But as Volta’s bankers at JPMorgan and Goldman Sachs went out to sell it, some investors pushed back, saying they’re full up on data-center debt and demanding more security and a higher interest rate. The deal is expected to price later this week with a rate of at least 11%, unusually high for a data-center project, anchored by a $1.5 billion order from Apollo, people familiar with the matter said.
Commitments for the deal are due this week and lenders are still in discussion about allocations, so details about the financing could change.
Volta’s deal is a pulse check on the AI-financing world. Deals are still getting done, but less smoothly than they were earlier this year, with higher rates and more heavily negotiated terms, investors and bankers say.
Volta was founded in February and the Norway data center is its first significant project. Some investors balked at its lack of a track record, while others were unnerved by Volta’s reliance on Anthropic to buy much of the data center’s compute. Anthropic doesn’t share much financial information with lenders and the exact level of its obligations struck some investors as unsettled.
The deal includes an unusual provision to overcome that skittishness: The interest rate charged to Volta will decrease if Anthropic can get an investment-grade credit rating, some of the people said. The Financial Times reported last month that Anthropic’s and OpenAI’s IPO advisers were lobbying credit-rating agencies for blue-chip status, which would be almost unheard-of for companies as unprofitable as both AI labs are.
JPMorgan and Goldman Sachs have also underwritten a $1.3 billion term loan to Volta.
JPMorgan, Goldman Sachs and Apollo declined to comment. Volta didn’t respond to a request for comment. Anthropic didn’t respond to requests for comment.
Know More
September has been the second-lowest month this year for issuance for AI financings, as regulatory and political challenges weigh on data center construction, according to a report from Morgan Stanley. The fourth quarter is expected to slow down further, the analysts said.