DC deals go short
Oracle and OpenAI have shelved plans to use an 800MW expansion to an AI data centre in Abilene, Texas, after negotiations over financing and OpenAI's changing needs hit the scheme, Bloomberg News reported.
The project was part of the US$500bn Stargate buildout and should still be expanded to 2GW from 1.2GW. Two buildings became operational at the site in September 2025, with full completion of the initially planned facility expected by mid-2026.
The Abilene data centre is owned by a joint venture of Blue Owl Capital, Crusoe Energy Systems, and Primary Digital Infrastructure, located on the Blackstone-backed Lancium Clean Campus, and leased to OpenAI and Oracle.
The news of the pullback came shortly after reports in Business Insider suggested Blue Owl Capital was unable to line up financing for its CoreWeave-leased data centre campus in Lancaster, Pennsylvania.
Blue Owl pushed back at the reports. “The central premise of the Business Insider article — that we encountered financing challenges related to the Lancaster project — is incorrect,” Blue Owl said in an emailed statement.
“We have not experienced financing issues on this project. Under our agreement with CoreWeave, our sole obligation is to provide approximately US$500m of bridge financing through March 2026, and that commitment remains fully in place.”
Some project financiers have said they are worried about data centre finance deals taking over their entire book, so large and so frequent are the amounts lenders are being asked to put up. Anyone selling into secondary markets are finding a tough crowd.
Against this backdrop, developer Core Scientific agreed a potentially US$1bn one-year loan facility backing development of its data centre assets. Morgan Stanley is providing the deal, which will be for an initial US$500m with an accordion feature that will allow for commitments to take that to US$1bn. Pricing is SOFR plus 250bp. Morgan Stanley did not immediately respond to a request for comment.
By way of comparison Oracle’s mega US$38bn financing for two Vantage Data Center campuses, with a potential six-year tenor, has the same pricing and is still being syndicated.
Core Scientific CEO Adam Sullivan said in a statement: “With this additional financing capacity, we can operate decisively by deploying capital to expedite project ready-for-service timelines, making us an even more compelling infrastructure provider for customers.”
Core Scientific expects to use proceeds from borrowings under the facility for general corporate purposes related to the development of data centre assets, including without limitation purchase equipment costs, pre-development costs, real property acquisition and costs related to the acquisition of, and entrance into, agreements for the procurement of additional energy for data centres, they said.
The company, which cut its teeth in bitcoin mining, is now moving into the AI data centre space and owns projects in Alabama, Georgia, Kentucky, North Carolina, North Dakota, Oklahoma, and Texas. The pivot comes at a time when it reported lower annual revenues year on year and plans to sell its bitcoin to fund the data centre push.
Core Scientific reported total revenues for 2025 down 37.53% from 2024's number to US$319m. Its collocation segment was up 268% year on year in Q4 2025 to US$31.3m, however, which is where it sees the opportunity.
Banks still need to be repaid whether that has to come in one year or six, which is what the tenor on the Oracle deal could extend to.
Data centre developer and Blackstone portfolio company Lancium closed on US$600m in financing to support the first 1.2GW at Abilene, Texas, in October. The deal was well received during the seemingly heady days of data centre debt a mere six months ago but now reports suggest lining up financing for the very same site caused the same companies to walk away.
For the October deal, Santander served as administrative agent for Lancium Abilene Holdings I on a US$350m term loan due September 2029 and a US$250m standby letter of credit due September 2029. Cantor Fitzgerald advised Lancium on the transaction, which was its inaugural debt financing.
Lancium is developing gigawatt-scale AI-focused data centres and Abilene as its flagship project. In 2024, Blue Owl, Crusoe, and Primary Digital Infrastructure entered into a US$3.4bn joint venture to fund Lancium Abilene.
Under the terms of the fully funded forward takeout, funds managed by Blue Owl's Real Estate platform and Primary Digital Infrastructure are jointly sponsoring the 998,000ft2 data centre being designed, built, and operated by Crusoe, an AI infrastructure company that converts stranded natural gas assets into power for data centres.
The power plan for the site includes both on and off-site renewable resources, including surrounding wind projects and a potential future large-scale onsite solar installation. The sponsors aim to optimise existing renewable power resources and incentivise new greenfield renewable power development.
With OpenAI and Oracle pulling out of the expansion, the door has opened for Meta to consider leasing the planned expansion site from developer Crusoe, with Nvidia reportedly part of the discussions.
Other parts of the data centre financing market seem to be maintaining pace. Applied Digital, through special purpose vehicle APLD ComputeCo, this month sold a US$2.15bn 144A/Reg S bond deal that will fund the development and construction of the 200MW Polaris Forge 2 data centre in Harwood, North Dakota.
Goldman Sachs, Citizens, Mizuho, and Nomura were the joint bookrunners on the five-year NC2 senior secured notes. The bonds were priced at US$98 with a 7.232% coupon to yield 6.75%. They opened with price talk in the 7.25%–7.5% range, before launching with a 6.75% yield. Fitch/Moody’s rated the deal BB–/Ba3. The notes come with an equity call back up to 40% at 106.75% until March 15 2028.
The same company sold a US$2.35bn 5NC2 senior secured green note issue with a 9.25% coupon at US$97 to yield 10.015% just last November through Morgan Stanley and JP Morgan to repay bank debt.
Applied Digital started construction on the US$3bn Polaris Forge 2 scheme in September 2025. The cashflows are fully contracted via a 15-year lease with an Oracle subsidiary. “The cashflows during the 15-year initial lease term are sufficient to repay the debt, eliminating renewal risk,” Fitch said.
The notes are secured by a first-priority lien on all project assets, contracts, and cashflows, Fitch said, except interconnection capacity above 50MW for Polaris Forge 2 and related revenues. A debt service reserve account, funded at closing, covers six months of debt service.
