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New deal, same AI appetite
Alphabet’s Google is back in the data-center financing game, this time by guaranteeing senior debt tied to a sprawling 2,900-acre AI campus in Hubbard, Texas. The project is linked to Anthropic, which is set to be the main tenant, and the financing package is part of a much larger $16 billion buildout.
Why this matters
This isn’t your average office lease drama. AI infrastructure is turning into a giant Rube Goldberg machine of loans, guarantees, power plants, and very expensive dirt. Google’s backstop helps make lenders more comfortable, but it also means Alphabet is putting more of its balance sheet credibility behind the AI arms race.
The money chain gets longer
Here’s the twist: the $1.3 billion piece is mezzanine debt, which sits below the safest layers of the capital stack. Translation: it’s higher risk, but that’s kind of the point — the whole project needs a lot of money, and somebody has to take the spicy slice.
- Morgan Stanley and other banks are leading the larger financing package
- The site may eventually include its own natural-gas-fired power plant
- Hut 8 also provided counterparty financial support tied to lease obligations
Big picture
If you’re watching Alphabet, this is another sign that its AI strategy isn’t just about software and search anymore. It’s increasingly about underwriting the physical world needed to keep AI humming — and that can be both a moat and a money pit.