HSBC CEO urged investors to be selective on data center financing

Georges Elhedery, CEO of HSBC, told CNBC on Tuesday that investors should be selective when financing data centers. He made the comment while describing artificial intelligence as a technology worth investing in.

"One has to be selective," Elhedery said, according to CNBC. "You have to look at the quality of the tenancy agreements. You have to look at the pricing of these contracts. Not all of them are of that level of virtuosity that you can support strongly. Some of them may be more challenging."

Elhedery called AI "a major enabler to re-engineer and reimagine all our businesses, all our activities." He said HSBC staff will become more productive with the technology and that the bank is still working toward embracing it, noting that AI should help "re-engineer the bank."

HSBC both funds and runs data centers, according to CNBC. The London-based bank's 2025 annual report set out an ambition to be "the leading bank for fast-growing transition ecosystems," and named data centers and artificial intelligence among the fields its clients work in. S&P Global $SPGI placed HSBC seventh among banks worldwide and first among European lenders last year, with nearly $3 trillion in assets, according to CNBC.

Data center campuses are the sites where the servers behind artificial intelligence and cloud services are kept. Worldwide data center spending could reach $7 trillion by 2030, according to McKinsey estimates cited by CNBC, and large technology companies are turning to private credit and debt to fund construction.

The borrowing has created tension in financial markets, according to CNBC. Mohamed El-Erian, who serves as Allianz's chief economic adviser and previously led PIMCO as its CEO, said at the GZERO Summit in London this month that governments and AI-related companies are competing for financing, which is putting pressure on bond markets.

El-Erian said hyperscalers brought in $200 billion through bond sales in 2025 and that he expects them to take in $1 trillion this year. He described them as "yield insensitive" and "spread insensitive," saying their wager is on something "truly transformational."

Bond yields in several major economies have climbed to levels not seen in decades during 2026, according to CNBC, as worries grow over government deficits, climbing debt, persistent inflation and central banks taking a tougher stance on rates. By the close of the decade, $4.1 trillion of AI-related debt will have been issued, JPMorgan $JPM Chase projected earlier this year, according to CNBC.