Securitization as a solution for our $2 trillion+ data center build out

We expect total global data-center capex over the next three years to exceed $2 trillion, with 2025 spend projected at more than $500 billion. Build-out is accelerating as demand from AI applications and the large amount of new software that AI is helping to write, grows.

Securitization - issuing bonds backed by data-center assets and cash flows - began appearing in the sector in 2018. It has expanded quickly and is set to become a major source of large-scale, long-term financing for data centers.

In the 2000s, data centers were funded through the balance sheets of data center owners (large technology companies, specialist data center operators, government and telecommunication companies). In the 2010s, loans secured on data centers became more common - adding bank and private credit fund assets to the mix. And since 2018, securitization has brought pension fund, insurance company, fixed-income fund, and sovereign wealth fund assets into data center funding at scale.

As the number of data centers around the world grows rapidly to meet new demand from AI, we will need to intelligently apply the large, long-term sources of capital that come to this sector at scale through securitization.

Securitization will fund new data centers of hyperscalers (AWS, Google, Microsoft, Oracle, IBM, etc.), of specialist operators (Vantage, Digital Realty, Equinix, etc.), and new entrants.