The price tag on AI infrastructure is forcing bankers to rethink how they’re financing it, according to a Goldman Sachs report published Wednesday. “If you look back at almost any transformative technology in history, the complexities and scale of each innovation required new financing methods to address those nuances,” the report said. “Today is no different.”
Data center developers are starting to use “creative financing structures” to bring investment for different parts of the build under one umbrella, the report said — opening the door for long-term pools of capital like pension and insurance funds seeking more stable returns. “The market is evolving, and contracts are evolving in a way that makes some of these contracts a similar level of credit risk or equity risk to traditional investment-grade bonds,” Jason Tofsky, a tech and media managing director in the company’s investment banking division, told Semafor. Changing how contracts are written could “drastically expand” the number of potential financiers, the report said.
Goldman also expects hyperscalers to increasingly spend more money outsourcing the building and maintenance of data centers to third parties like QTS, Digital Realty, and Equinix — despite operating their own data center businesses — because it helps them get online faster. The shifts mark how insatiable demand for new technologies requires entire businesses and financial systems to evolve with it.