> The taxpayer bailout of failed US data center projects will be unprecedented

Banks including JPMorgan Chase struggled for months to spread the risk of billions of dollars in loans they made to build data centers leased to Oracle in Texas and Wisconsin, people familiar with the matter said. Many financial institutions that would ordinarily buy those loans face restrictions on how much exposure they can have to a single counterparty, and the sheer size of these debt packages pushed them to the limit with Oracle.

For example, lenders balked at financing the expansion of a data-center complex in Abilene, Texas, if Oracle were the tenant, according to people familiar with the matter. That led the developer, Crusoe, to lease it to Microsoft instead.

The challenges surrounding Oracle highlight a risk for the multitrillion-dollar data center boom, where limited access to capital compounds obstacles caused by a strained electric grid and a growing public backlash.

Any slowdown in data center construction and completion would stymie a build-out that artificial-intelligence players desperately need. Some top AI companies appear to be hitting the limit of what they can offer users as demand for computing firepower, which is provided by data centers, exceeds supply.

Big tech companies are expected to generate enough cash to cover only about half of the $3 trillion they are projected to spend on AI through 2028, according to analysts at Morgan Stanley. The rest has to come from banks, corporate bonds, private credit and other forms of financing.

Much of the borrowing tied to the OpenAI megacontract was done by projects involving data center developers working with Oracle. The debt was structured as short-term construction loans meant to be syndicated among a group of banks and other institutions. Oracle is the tenant and OpenAI is the subtenant on the deals, but the debt doesn’t sit on Oracle’s balance sheet.

These loans were among the largest-ever deals in project finance, bankers say. About $10 billion in loans were taken out for Crusoe to develop the original OpenAI site in Abilene. Vantage Data Centers is constructing a campus in Shackelford County, Texas, and another in Port Washington, Wis., with $38 billion in borrowed money. A Stack Infrastructure project for a fourth OpenAI facility in Dona Ana County, N.M., raised about $18 billion.