The financing boom for artificial intelligence infrastructure shows no signs of slowing. Recently, a record-breaking transaction involving an Alphabet-supported data center, along with an additional bond sale by cloud infrastructure firm CoreWeave, Inc., collectively raised $6.7 billion in new high-yield debt. According to informed sources, the Alphabet-linked deal—a $5.7 billion issuance led by Morgan Stanley—was priced on Thursday after attracting $19 billion in investor orders. The proceeds will fund the construction of two data centers at a campus in Sullivan County, Indiana. These facilities will be leased to cloud computing startup Fluidstack Ltd. and are guaranteed by Alphabet.
Simultaneously, CoreWeave, Inc. sold an additional $1 billion of bonds maturing in 2031, just one week after its initial offering. The company is capitalizing on sustained strong investor demand for AI-related deals, even as borrowing plans for other firms have stalled due to conflicts in the Middle East.
The rapid expansion of AI has led to unprecedented shortages in data center space, GPU chips, and the power supply needed to support operations. To finance these needs, companies are tapping every corner of the debt market, from high-yield bonds to project financing. Although some borrowers paused debt sales due to geopolitical tensions, Wall Street has successfully secured tens of billions of dollars in recent weeks. As optimism grows regarding potential long-term peace agreements, borrowing costs have generally declined for various companies, leading to a recovery in issuance volume. Yields on high-risk bonds have returned to pre-conflict levels.
The new five-year notes for the Indiana data centers were sold by Meridian Arc HoldCo LLC, a joint venture created by entities under Next Frontier LLC and Fluidstack. Data indicates this $5.7 billion bond issuance is the largest AI-related high-yield dollar-denominated deal in the U.S. market and the biggest ever led by a single Wall Street institution. The transaction was successfully completed just one day after formal marketing began. One source noted the bonds were priced at par with a yield of 6.25%, at the low end of the price talk range.
This issuance surpasses the previous record for a high-yield deal led by a single underwriter, also held by Morgan Stanley: a $3.2 billion bond last year for cryptocurrency miner TeraWulf Inc., which was similarly guaranteed by Alphabet.
Fluidstack assists in data center development by building and operating high-performance computing infrastructure, a business area thriving amid the AI boom. The company recently announced a $50 billion deal with Anthropic to construct custom data centers for the large language model maker. Last August, Fluidstack opted to expand its usage of a New York data center operated by TeraWulf. Around the same time, Alphabet increased its guarantee for TeraWulf to $3.2 billion to support debt financing. The tech giant also raised its pro forma equity stake in TeraWulf to approximately 14%.
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