A $16 billion financing package for a massive Oracle Corp. data center in Michigan has closed after months of difficult negotiations, the latest sign of both the enormous appetite for AI infrastructure and the growing wariness among investors asked to fund it.
Bank of America sold $14 billion in bonds tied to the project, with Pacific Investment Management Co. serving as the anchor buyer, according to a statement from Related Digital, the data center’s developer. Pimco alone purchased roughly $10 billion of the bonds, with other institutional investors absorbing the remainder, according to people with knowledge of the deal who asked not to be identified because they are not authorized to speak publicly.
The bonds, sold privately in a 144A offering available only to large institutional investors, mature in 2045, were priced at 98.75 cents on the dollar and carry a 7.5% coupon. Wells Fargo and Goldman Sachs were also involved in the transaction. Representatives for Bank of America, Wells Fargo and Goldman Sachs did not immediately respond to requests for comment.
The debt is part of the broader $16 billion package that will fund a data center campus in Saline Township in southeastern Michigan. Oracle is the tenant and is expected to use the facility to power applications for OpenAI. The financing also includes equity contributions from Related Digital and funds affiliated with Blackstone Inc., which put in roughly $2 billion.
Related Digital, a venture of New York-based property developer Related Cos., said the project would play a critical role in the country’s digital future.
The prolonged path to closing underscores how Wall Street is applying greater scrutiny to the debt-fueled AI infrastructure boom even as demand for data center capacity continues to surge. The Michigan deal follows a series of even larger financing packages assembled for Oracle data centers, including a $38 billion deal for facilities in Texas and Wisconsin and an $18 billion package for a site in New Mexico.
The broader buildout shows little sign of slowing. The largest technology companies are pouring hundreds of billions of dollars into data centers and AI infrastructure, with much of that capital coming from debt markets. Since last year, at least $290 billion in financing has been arranged for hyperscaler projects. Oracle has emerged as one of the largest high-grade corporate bond issuers in the United States, with roughly $120 billion of notes in the main U.S. corporate bond index. In early February, the company sold an additional $25 billion in bonds.