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Larry Ellison’s tech group has partnered with builders and financiers such as Crusoe, Blue Owl Capital, Vantage and Related Digital to build numerous data centres that will ultimately each be owned by SPVs.
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Its off-balance sheet financing deals include about US$13 billion invested by Blue Owl and JPMorgan, including US$10 billion of debt, into an SPV that owns its OpenAI facility in Abilene, Texas; a US$38 billion debt package to pay for two data centres in Texas and Wisconsin; and an US$18 billion loan for a site in New Mexico.
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In each case, Oracle has agreed to lease the facilities from the SPVs. In the event of a default, lenders would have recourse over the assets — the data centre, the land it sits on and the chips that power it — and not the companies that manage the sites.
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Raising off-balance sheet debt via an SPV has become more popular as the amount of capital needed to fund AI infrastructure has skyrocketed, stretching tech companies’ cash reserves. Morgan Stanley estimated that US$1.5 trillion of external financing was needed to fund tech companies’ AI plans.
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In many cases, investors in these data centre deals have been convinced that the financial risk ultimately still lies with the tech company leasing the site, should demand for AI services fall, resulting in a hit to the value of these huge computing facilities.
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In the case of Beignet Investor, Meta owns 20 per cent of the SPV and has given a “residual value guarantee” to the other investors. This means that the social media group would have to repay the SPV investors if the value of the data centre drops below a certain level by the end of the lease and Meta decides not to renew.
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Musk’s AI start-up xAI is pursuing a similar structure as part of a US$20 billion fundraise, including as much as US$12.5 billion in debt. The SPV will use the money to buy Nvidia Corp. graphics processing units and lease them to xAI.
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CoreWeave said in March that it had created an SPV to fulfil a US$11.9 billion contract to supply computing power to OpenAI, which would “incur indebtedness to finance its obligations.” In July, it borrowed US$2.6 billion to fund its OpenAI contracts.
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Private capital investors are keen to get in on the AI boom, boosting demand for these novel structures. Tech companies had borrowed about US$450 billion from private funds as of early 2025, US$100 billion more than over the previous 12 months, according to UBS.
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This year, about US$125 billion flowed into “project finance” deals — long-term financing of infrastructure projects — such as the Meta and Blue Owl transaction, UBS said.
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Data centre construction has become largely reliant on deep-pocketed private credit markets, a rapidly inflating US$1.7 trillion industry that has itself prompted concerns due to steep rises in asset valuations, illiquidity and concentration of borrowers.
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“There is risky lending and underlying credit risk built up in private credit already,” said one banker close to data centre financing deals. “This creates a very interesting set-up for the next several years, as you have two material risks to the outlook becoming more intertwined.”
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The risk in these structures largely depends on how widespread they become. If multiple AI companies are using SPVs, stress can spread through the private credit funds behind them simultaneously with little transparency.
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The AI data centre boom also largely relies on a small group of clients. OpenAI alone has made more than US$1.4 trillion in long-term computing commitments across most of the sector’s big players.
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