Project financing for data centers, driven by massive demand for AI, is experiencing unpresented growth potential. Estimates for global infrastructure investment related to data centers routinely run into trillions of dollars in the coming years.
Jones Day’s John Mazey explains how private credit transactions will be key to deploying capital to these critically needed projects.
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John Mazey:
Where I see private credit servicing and helping the expansion of digital infrastructure needs, whether we have hyperscalers looking at $50 billion projects or we have somewhat smaller players looking at $100 million projects, private credit is going to be there every step of the way. There happens to be some risk in those transactions. As we all know, the AI revolution is upon us and that's going to continue to accelerate very rapidly. And how those data centers and what those needs are are going to continue to evolve, whether the facilities are going to require to be as large as they are now, or there's going to be a shift in that technology. The physical technology to outfit a data center is evolving just as rapidly as the AI revolution is upon us. So you have engineers and folks on the ground trying to figure out how to outfit the data centers.
At the same time, you have capital to be invested in those transactions and investment professionals trying to understand the right rate of returns that they should expect in those transactions. And that is all evolving at the same time. It's not going anywhere. It's growing and private credit is going to be instrumental in satisfying the world's needs to deploy and provide the data center services that we need.
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