Volta, an AI infrastructure company, recently sought $5 billion for a data center in Norway. Some investors pushed back as Volta's bankers at JPMorgan and Goldman Sachs marketed the deal. Those investors said they had reached their limits for data-center debt and demanded more security and a higher interest rate.
People familiar with the matter said the deal is expected to price later this week at a rate of at least 11%. That rate would be unusually high for a data-center project. The people said a $1.5 billion order from Apollo would anchor the deal. Commitments are due this week. Lenders are still discussing allocations, so financing details could change. JPMorgan and Goldman Sachs have also underwritten a $1.3 billion term loan to Volta.
More than $450 billion in AI-related debt deals have been completed so far this year. Investors and bankers say deals are still being completed, but less smoothly than earlier this year. Investors and bankers say rates are higher and terms are more heavily negotiated.
Volta was founded in February, and the Norway data center is Volta's first significant project. Some investors objected to Volta's lack of a track record. Other investors were concerned about Volta's reliance on Anthropic to buy much of the data center's computing capacity. Anthropic shares little financial information with lenders. Some investors viewed the exact level of Anthropic's obligations as unsettled.
Some people familiar with the matter said the deal includes a provision intended to address those concerns. Under that provision, Volta's interest rate will decrease if Anthropic obtains an investment-grade credit rating, the people said. The Financial Times reported last month that IPO advisers for Anthropic and OpenAI were lobbying credit-rating agencies for blue-chip status. Such status would be almost unheard-of for companies as unprofitable as the two AI laboratories.
JPMorgan, Goldman Sachs and Apollo declined to comment. Volta did not respond to a request for comment. Anthropic did not respond to requests for comment.
Volta's $5 Billion Debt Deal Reflects Challenges in AI-Financing Boom
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Summary
AI + crypto news broke Tuesday as Volta, an AI infrastructure firm, seeks $5 billion for a Norway data center. Investors are wary of data-center debt and Anthropic’s financial clarity. The deal is expected to price at 11% or higher, with Apollo committing $1.5 billion. Concerns include Volta’s lack of experience and reliance on Anthropic for computing. A clause could cut Volta’s rate if Anthropic hits investment-grade status. Inflation data remains a backdrop for risk assessments in high-yield tech financing.
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