'Does All This Money Even Exist?': Developers Seek New Sources Of Capital To Fund AI Boom

Trillions of dollars are needed by the end of the decade to meet the anticipated demand for artificial intelligence data centers. 

To avoid a funding shortfall, tech giants and developers are being forced to get creative in establishing additional pathways for new sources of capital to access commercial real estate's most in-demand sector. 

Data center construction spending may have doubled in 2025, but the record flood of new digital development is expected to accelerate even further this year. JLL projects global data center capacity will double by the end of the decade — an “infrastructure investment supercycle” it says will require as much as $3T in total investment and roughly $870B in new debt financing. 

New sources of capital are urgently needed, as industry leaders tell Bisnow that much money likely won't be available from the lenders and equity investors that have been funding the bulk of the industry’s growth to date. 

“Does all this money even exist?” said Andrew Batson, JLL's global head of data center research. “We need more sources of capital.”

While Batson and other leaders across the data center industry don’t foresee a funding shortfall in the near term, developers and tech firms are scrambling to create new investment vehicles and structures that expand the pool of lenders and equity investors with access to the sector. 

This has come in the form of increased reliance on structured debt and the growing willingness of tech firms to act like banks and leverage their credit ratings to make lenders and investors more comfortable with third-party projects. 

The financing landscape is expected to evolve rapidly in the coming months. The firms that see the most success, industry leaders say, will be those with the creativity to structure capital in ways that others haven’t yet considered.

Parametrix CEO Jonathan Hatzor said expanding the investor base “remains a challenge.”

“To meet capital requirements at scale, the sector must continue to attract a broader pool of institutional capital, including traditional real estate investors who require greater cash-flow predictability and risk clarity before allocating meaningfully to digital infrastructure,” he said in an email to Bisnow.

One of the primary ways data center firms are expanding the capital pool to fund data center buildout is through the growing use of structured debt such as asset-backed securities and commercial mortgage-backed securities. 

As recently as 2021, the only way a data center developer could monetize a stabilized asset to raise development capital was by selling the entire facility — a transaction with a limited number of potential buyers.

Now, developers are leveraging existing facilities to raise securitized debt financing. 

Investors have proven eager to snap up these bonds, which typically provide the data center owner with liquidity to pay off construction debt, while a quarter of the loan’s value can be recycled into funding new development, according to Goldman Sachs.

Over the past two years, data center-backed ABS and CMBS deals have gone from obscurity to primary tools through which development is financed.

ABS loan activity increased sharply in 2025, with issuance volumes roughly doubling every year since 2020, according to JLL. The brokerage expects this trend to accelerate in 2026, with issuances of structured debt tied to data centers potentially reaching $50B.

“Asset-backed securities (ABS) have become the default play in data center finance,” Julie Brewer, executive vice president of finance at EdgeCore Digital Infrastructure, said in an email. “What didn’t exist three years ago is now the go-to once a building is delivered, and the next evolution of capital structuring is already on the horizon.”

Data center-backed structured debt offerings are becoming more complex, with offerings targeting a wider array of potential investors. While the majority of past structured debt offerings have been tied to small portfolios of hyperscale facilities leased to credit-grade tenants, a growing share of structured debt is tied to companies and facilities with far higher risk profiles.  

This includes a growing number of bond offerings tied to neoclouds, a segment of AI-focused startups that have undergone dramatic growth over the past two years. Neocloud Nebius funded data center development through a $1B bond offering last year. Similarly, neocloud and former cryptominer TeraWulf raised $3B to build data centers for Google through the sale of high-yield “junk bonds.” 

The structured debt landscape tied to data centers is only expected to diversify in the months ahead. 

“As technology and infrastructure demands continue to grow, banks and investors will need to adapt to new, creative frameworks,” Brewer said. “In 2026, ABS won’t just be an option but the baseline, setting the stage for the next wave of financial innovation in the industry.”

As neoclouds and AI startups such as OpenAI account for a larger share of data center demand, Big Tech is playing a leading role in ensuring that financing projects tied to these firms are palatable to a wider array of potential funding sources. 

Infrastructure projects to serve these fast-growing but cashflow-negative startups are typically regarded as far too risky to be financeable through traditional commercial real estate or project finance lending channels, said Tom Traugott, EdgeCore’s senior vice president of emerging technologies.

Now, he said investment-grade tech giants like Amazon, Google and Microsoft are leveraging their credit ratings and strong balance sheets to de-risk these projects and give traditional lenders the confidence to finance data centers that would otherwise exceed their acceptable risk tolerance. 

The willingness of the world’s largest tech firms to absorb development risk for the benefit of AI upstarts was on display last year through Nvidia’s $100B strategic partnership with OpenAI, a deal through which the chipmaker backed the development of 10 gigawatts of new data center capacity. 

Examples are also emerging in the structured debt markets through deals like Google’s agreement to backstop more than $3B in tenant lease obligations to facilitate the construction of a TeraWulf data center in New York. 

“These partnerships are no longer exceptions — they’re becoming the model,” Traugott said. “Expect the biggest tech players to keep absorbing counterparty risk and doubling down on AI’s long-term promise.”

Other industry leaders anticipate new entrants into the data center sector looking to invest at the platform level, acquiring data center developers and operators rather than investing in specific assets or projects. 

The industry saw a record M&A wave between 2021 and 2023 in which major operators such as QTS, CyrusOne and Compass were acquired by institutional investors like Blackstone, KKR and Brookfield. The data center ecosystem has shifted dramatically since then, with a wide array of new developers and operators emerging amid booming AI demand and an increasingly complex power landscape.  

This could spell opportunity for investors that sat out the last round of acquisitions and are looking for large-scale exposure to the digital infrastructure space, said Dan Campbell, an attorney at Hunton Andrews Kurth who advises on data center deals.

“There’s people who missed out on this first wave of data center development and are trying to catch up,” Campbell said. “It’s big players coming in and doing large M&A deals to buy existing firms to get exposure to the market that they feel like they missed.”