Meta Faces Higher Rates on $12 Billion Texas Data Center as AI Capex Fears Widen Spreads
Updated
Updated · CNBC · Jul 24
Meta Faces Higher Rates on $12 Billion Texas Data Center as AI Capex Fears Widen Spreads
3 articles · Updated · CNBC · Jul 24
Summary
Meta is set to finalize financing for its $12 billion Texas data center early next week, with the debt expected to price at a higher borrowing rate than its previous projects.
Credit investors are demanding more yield as AI buildout costs climb, after Alphabet raised capex guidance and bond spreads widened for Meta, Amazon and Google.
Power and infrastructure inflation are adding to the strain: energy costs for hyperscalers are rising, and oil moved above $100 a barrel this week.
Oracle’s 5-year CDS has returned to a multi-year high as a hedge on AI debt risk, underscoring broader concern that hyperscalers could soon outspend their free cash flow on capex.