Debt tied to Meta’s Hyperion campus and Microsoft’s Project Excalibur has fallen below par as Gartner warns the AI buildout needs $8.5 trillion in revenue through 2030.
The debt market is finally pricing the AI data-center gamble.
The Financial Times reported that bonds financing the Hyperion and Project Excalibur campuses sank below par: Hyperion debt fell below 92 cents on the dollar, while bonds for the QTS project leased to Microsoft fell below 88 cents.
These are project-finance bonds, not Meta or Microsoft corporate bonds. Meta’s Hyperion release says the campus is owned through an 80%-Blue Owl, 20%-Meta joint venture. QTS debt supports the Georgia campus where Microsoft is the tenant.
CoreWeave’s own debt is in harsher territory. Its April-issued bonds traded at 79.15 cents on the dollar and yielded about 15% on Oct. 15, Reuters reported. The Nvidia-backed neocloud had about $50 billion in debt, Reuters said.
The bigger warning came from Gartner. Its model says AI data-center owners need $8.5 trillion in cumulative revenue through 2030 to cover announced capital spending, financing costs, and a 12% return on invested capital. Gartner projects no more than $3.6 trillion in related AI revenue.
That leaves a $4.9 trillion revenue gap. Gartner also said more than $3.5 trillion in AI infrastructure spending could face impairment by 2030 if the present buildout continues, and predicted more than 80% of neoclouds will cease independent operations.
Bond investors are demanding higher returns from the most leveraged AI borrowers.