How AI data centers are financed: project loans, leases and SPVs

Large AI campuses are usually financed by a separate project company that borrows against a long lease from a creditworthy tenant, with the tenant, the developer and outside investors each holding a different slice. The structure lets billions be raised without all of it appearing as debt on the tenant's own balance sheet.

This explainer defines the terms, then walks through the two best documented public examples: the Abilene, Texas campus built for Oracle and OpenAI, and Meta's Hyperion campus in Louisiana. It then looks at a third model, where a GPU cloud company borrows against its chips and customer contracts. Figures come from company filings, trade press and company announcements. Trade press figures are unaudited and sometimes conflict; where a filing exists, it is used. This is an explainer, not investment advice and not a view on whether any of these structures is wise.

Key numbers at a glance

• Hyperion, Louisiana (announced 21 October 2025): about 27 billion dollars in expected total development costs for buildings and long lived power, cooling and connectivity infrastructure (Data Center Frontier, quoting the announcement).
• Hyperion ownership: funds managed by Blue Owl hold 80 percent of the joint venture and Meta holds 20 percent (Data Center Frontier and Bisnow).
• Hyperion equity (Meta Form 10-Q, quarter to 30 September 2025): Blue Owl's affiliate contributed 7.0 billion dollars in cash; Meta contributed 4.3 billion dollars, mostly land and construction in progress, and received a one time distribution of 2.6 billion dollars. Data Center Frontier had reported the distribution as about 3 billion dollars.
• Hyperion debt: Bisnow reports Pimco issued about 27 billion dollars of investment grade bonds backed by the project, priced above 1.10 dollars per dollar of face value. Bisnow does not reconcile that with the 7 billion dollar equity figure, and Data Center Frontier says debt was led by Pimco but gives no amounts. Treat the debt size as unconfirmed.
• Hyperion lease (Meta Form 10-Q): leases start in 2029, initial commitment about 12.3 billion dollars over a four year term, renewable up to 20 years in total; residual value guarantee for the first 16 years, with a threshold that starts at 28 billion dollars and declines over time.
• Abilene phase one (Commercial Observer, 22 January 2025): a 2.3 billion dollar JPMorgan construction loan for a 206 megawatt phase reported as 100 percent leased to Oracle; the joint venture formed in October 2024 at a 3.4 billion dollar valuation.
• Abilene phase two (Bisnow, May 2025): 11.6 billion dollars in debt and equity, of which JPMorgan supplied 7.1 billion dollars; phase one financing of about 4 billion dollars; about 15 billion dollars across the project.
• Abilene land (Bisnow, May 2025): a 900 acre ground lease from Lancium; Primary Digital Infrastructure's capital contribution described as comparatively small.
• Epoch AI (23 April 2026): the Stargate effort is described as a 500 billion dollar initiative involving OpenAI, Oracle and SoftBank; Oracle owns the hardware at most sites and SoftBank at two. Epoch also notes financing and equipment procurement are ongoing challenges.
• Meta CFO, second quarter 2025 earnings call (via Bisnow): Meta will keep funding most data center development from its balance sheet while increasing off balance sheet financing for flexibility.
• Cushman & Wakefield (Business Wire release, 3 September 2026): about 17.6 million dollars per megawatt all in for modern greenfield builds, excluding chips; global pipeline about 2.3 trillion dollars, including 492 billion dollars under construction.
• CoreWeave Form 10-K (fiscal 2025): total debt of 21.6 billion dollars at 31 December 2025; GPU purchases funded through delayed draw term loan facilities of up to 2.3, 7.6, 3.0 and 2.6 billion dollars, held in subsidiaries.
• CoreWeave, same filing: 60.7 billion dollars of remaining performance obligations, with committed customer contracts averaging about five years.
• CBRE (8 September 2026): over 80 percent of capacity under construction in eight primary North American markets is preleased.

Why financing structure matters

At 17.6 million dollars per megawatt, which is Cushman & Wakefield's all in average for the newest US and Canadian builds excluding chips, multiplying by 1,000 megawatts gives around 17.6 billion dollars of buildings and power for a one gigawatt campus. That is derived arithmetic, not a figure Cushman & Wakefield published for a gigawatt campus. Add computers and the figure grows several times. Few companies want to fund that from cash alone, and even the richest ones weigh how much debt to show.

Financing therefore shapes who bears the risk if demand changes, how fast the campus can be built, and how a company's reported debt looks. It is also where the terms that surprise newcomers appear: special purpose vehicles, residual value guarantees, ground leases and build to suit leases.

The building blocks

Equity. Money put in by owners, who are paid last and gain or lose most. In a joint venture, equity comes from sponsors such as a developer, a fund and sometimes the tenant.

Debt. Borrowed money, repaid first, with interest. For campuses, it often comes as a construction loan and later as bonds or term loans.

Construction loan. A loan drawn in stages as building proceeds, usually repaid or replaced once the facility is running and earning rent.

Project finance. Lending to a standalone project company, repaid from that project's income, and secured on the project's assets and contracts rather than on a parent company's general credit. The lender's main question is: will the cash flows from this project, mostly the lease, repay the loan?

Special purpose vehicle, or SPV. A legal entity created for one project. It holds the asset and the debt, so they are separate from the sponsor's other businesses. A joint venture is often structured as one.

Off balance sheet. Accounting treatment where a company does not list an asset and its debt on its own balance sheet, often because another entity owns it. Whether that treatment applies depends on accounting rules and the facts of each deal; this explainer does not assess any specific case.

Ground lease. The developer leases the land rather than buying it, as at Abilene, where Bisnow reports a 900 acre ground lease from Lancium.

Residual value guarantee. A promise to cover any shortfall if a lease ends and the asset is worth less than an agreed amount. It lowers the lender's risk if the tenant leaves.

Private credit. Loans made by investment funds rather than banks. Fund managers such as Blue Owl and Pimco appear in the examples below.

Example one: Abilene, built by a developer for Oracle

Abilene shows the lease backed project loan in its simplest form. The sequence below is from Commercial Observer and Bisnow.

1. A joint venture of Blue Owl Capital, Crusoe Energy Systems and Primary Digital Infrastructure was formed in October 2024 at a 3.4 billion dollar valuation.
2. JPMorgan provided a 2.3 billion dollar construction loan, reported on 22 January 2025, for a 206 megawatt, 998,000 square foot first phase. Bloomberg, cited by Commercial Observer, reported it as 100 percent leased to Oracle. Groundbreaking had been in late 2022 on the Lancium Clean Campus.
3. In May 2025 the venture announced 11.6 billion dollars in debt and equity for the second phase of the 1.2 gigawatt campus. JPMorgan supplied 7.1 billion dollars, and the article says it does not split the remaining 4.5 billion dollars or so between debt and equity. Newmark facilitated the construction loan.

The roles are separate. Crusoe develops and builds. Blue Owl and Primary Digital Infrastructure invest through the venture. JPMorgan lends. Oracle is the tenant under the lease, and OpenAI is the end user of the computing. Epoch AI adds that Oracle owns the computing hardware at most Stargate sites, and SoftBank at Milam County and Lordstown.

Two details are worth noting. The lender is not relying on the developer's own balance sheet. It relies on the lease. And Primary Digital Infrastructure's capital contribution is described by Bisnow as comparatively small, which shows that a sponsor can lead a project with little of its own cash if lenders accept the lease. Bisnow reports no lease term or rent, and neither appears in the published reports, so how long Oracle is committed is not public.

Example two: Hyperion, Meta's joint venture

Hyperion shows the same logic applied by a very large company that could fund the project itself.

According to Data Center Frontier, quoting the announcement, Meta and funds managed by Blue Owl formed a joint venture to finance, develop and own the campus in Richland Parish, Louisiana, with total expected development costs of about 27 billion dollars for the buildings and long lived power, cooling and connectivity infrastructure.

Meta's own quarterly report for the period to 30 September 2025 gives the precise terms, in a note describing the deal as a subsequent event. At closing in October 2025, Meta contributed 4.3 billion dollars, mostly land and construction in progress, and the Blue Owl affiliate contributed 7.0 billion dollars in cash. Meta received a one time distribution of 2.6 billion dollars, slightly below the roughly 3 billion dollars Data Center Frontier reported. Meta holds 20 percent of the venture and the investor 80 percent. Meta provides construction management, administrative and property management services, and is the anchor tenant.

Bisnow adds that much of Blue Owl's capital is debt raised through securities Pimco issued earlier in October 2025, about 27 billion dollars of investment grade bonds backed by the project, which priced above 1.10 dollars per dollar of face value. A price above face value means buyers were willing to pay a premium for the bonds, that is, demand was strong. Bisnow does not reconcile the 27 billion dollar bond figure with the 7 billion dollar equity contribution, and Data Center Frontier gives no debt amounts. If you need that number, check the primary filings.

The lease is the unusual part. Meta's filing says the leases commence in 2029, with an initial commitment of about 12.3 billion dollars for a four year term and options to renew for a total lease period of up to 20 years. Bisnow notes hyperscale leases are typically 10 years or longer, so four years is short. Alongside the lease, Meta provides a residual value guarantee for the first 16 years of operations. If a lease is not renewed or is terminated and the data center's value then falls below an agreed threshold, Meta makes a capped cash payment equal to the difference. The filing says the threshold effectively begins at 28 billion dollars and decreases over time. So the lender gets both a short lease and a long guarantee from a highly rated company.

The accounting follows from who controls the venture. Meta's filing says it will treat its 20 percent stake as an equity method investment and that, because it does not direct the activities that most significantly affect the venture's economic performance, the venture is an unconsolidated variable interest entity. In plain terms, a variable interest entity is a company whose risks and rewards can sit with someone other than its majority owner; the party that controls its key decisions must consolidate it. Meta concluded that party is not Meta, so the venture's debt does not appear on Meta's balance sheet. The filing gives the total initial lease commitment and the starting guarantee threshold, but not the annual rent or the dollar cap on the guarantee payment.

Bisnow says the structure lets Meta effectively borrow without the debt appearing on its balance sheet, and records Meta's CFO saying on the second quarter 2025 call that it will keep funding most data center development from its balance sheet but increase off balance sheet financing for flexibility.

A third model: borrowing against the chips

Abilene and Hyperion finance buildings. The computers inside are a separate, large cost on a shorter replacement cycle, and some companies finance them separately. CoreWeave's annual report for 2025 is the most detailed public example.

CoreWeave says it primarily finances its infrastructure through asset level debt supported by take or pay customer contracts, supplemented by corporate equity and debt. Take or pay means the customer commits to pay for a set amount of capacity over the contract term whether or not it uses all of it. Those contracts are what lenders lend against.

The loans sit in separate subsidiaries, which is the SPV idea applied to hardware. The filing describes delayed draw term loan facilities, meaning loans that can be drawn in stages as equipment is bought: up to 2.3 billion dollars from July 2023, up to 7.6 billion dollars from May 2024, up to 2.6 billion dollars from July 2025, and a further tranche of up to 3.0 billion dollars added in September 2025. Each was taken out by a subsidiary such as CoreWeave Compute Acquisition Co. II. How much can be borrowed is tied to the depreciable cost of the GPU servers being bought, and the loans are secured by the equity of those subsidiaries and substantially all of their assets. CoreWeave guarantees them unconditionally, so the separation is not complete.

The scale is large. CoreWeave reported total debt of 21.6 billion dollars at 31 December 2025, and 60.7 billion dollars of remaining performance obligations, which is revenue under signed contracts not yet delivered. Its committed contracts had a weighted average duration of about five years. The September 2025 tranche, for example, is repaid in quarterly instalments from July 2026, with the final payment due five years after each loan is funded, a span close to the average customer contract.

The comparison with Hyperion is useful. In both cases a lender looks past the operating company to a defined pool of assets and a contract with a large customer. The difference is what wears out. A building can be re-let for decades, which is why a residual value guarantee makes sense there. For GPU servers, CoreWeave's lenders size the loans to the servers' depreciable cost, and repayment runs over a period similar to the customer contracts behind them.

What each party gets

• The tenant gets capacity without owning all of the asset, and conserves cash for chips and operations. It takes on lease payments and, in some structures, a guarantee that could become a cash payment.
• The developer gets fees and a stake, and a lender willing to finance against a lease.
• The equity investor gets a stake in a contracted income stream. Blue Owl appears as an investor at both Abilene and Hyperion.
• The lender gets security on the project and the tenant's lease, plus, in Hyperion's case, a residual value guarantee.
• The utility and ratepayers face their own risk. In Louisiana, approvals for the new power plants passed 4 to 1, and opponents raised concerns about transmission cost and gas price risk (KALB). This is financing at another level: who pays for the grid.

Concerns raised

Bisnow quotes two critics on Hyperion; their comments are opinions. Paul Kedrosky, of SK Ventures, said that the use of SPVs shows firms trying to keep spending from rating agencies and the market, which he reads as a sign the AI bubble is tiring. Dario Perkins of TS Lombard said he would not touch this kind of paper now, and compared conditions more to 2000 than 1995. These views are the critics' own, and this explainer neither endorses nor disputes them.

The structural questions critics raise are real in any lease backed deal. What happens if the tenant needs less capacity? What is the building worth to another tenant, given that designs are tailored to current chips and cooling? A residual value guarantee is the answer to the second, and it is a reminder that the risk has not disappeared, only moved. Epoch AI also notes financing and equipment procurement are cited as ongoing challenges for Stargate, without giving loan details.

How big is the pool of money?

Cushman & Wakefield puts the global data center pipeline at about 2.3 trillion dollars, including 492 billion dollars under construction and 1.8 trillion dollars planned or precommitted, according to the Business Wire release. That is a market projection and a count of plans, not committed financing. CBRE's report shows demand is heavily spoken for, with over 80 percent of capacity under construction in primary markets preleased. Preleased capacity is easier to finance, since a tenant has already signed. That is one reason financing activity has followed the leases.

What is firm and what is uncertain

Firm, as stated in filings or by named sources: the Hyperion ownership split, contributions, lease commitment and guarantee threshold in Meta's 10-Q; CoreWeave's debt facilities and customer contract duration in its 10-K; and the Abilene loan sizes as reported.

Uncertain: the amount and terms of Hyperion's debt, since Meta's filing does not give it and press reports differ; Abilene lease length and rent; how any structure would be treated by accountants or ratings agencies; and everything about future performance. Private company figures are unaudited, and several come from people close to deals rather than filings.

What to watch next

• Disclosure of lease terms and guarantees in filings of tenants and funds.
• Whether other large tenants adopt short lease and long guarantee structures.
• Whether pre-leasing and vacancy in CBRE's next report change the appetite of lenders.
• How the long lead power projects, such as those in Louisiana, progress against their reported dates.

Related: what AI data centers cost per megawatt, colocation, self build or lease, and the contract side in OpenAI compute commitments and Stargate and Anthropic compute commitments.

Quick check

If you are mapping the software behind your own systems, Safeguard offers SBOM and dependency scanning, plus a free scan at https://gold.safeguard.sh/scan.

Sources

• Bisnow, Meta pushes its largest data center project off its books, October 2025
• Data Center Frontier, Meta Hyperion campus financing
• Bisnow, Primary Digital Infrastructure and the Stargate Abilene financing, May 2025
• Commercial Observer, JPMorgan loan for Texas data center leased to Oracle, 22 January 2025
• Epoch AI, OpenAI Stargate: where the US sites stand, updated 23 April 2026
• Cushman & Wakefield 2026 Data Center Development Cost Guide, Business Wire release via Finviz, 3 September 2026
• CBRE, North American data center demand continues to outpace supply, 8 September 2026
• Meta Platforms, quarterly report on Form 10-Q for the quarter ended 30 September 2025, SEC EDGAR
• CoreWeave, annual report on Form 10-K for fiscal 2025, SEC EDGAR
• KALB, Louisiana regulators approve Entergy power plants for Meta's AI data center, 21 August 2025

Last reviewed: 19 October 2026.