AI Data Center Borrowing Costs Rise, A Must-See for Founders(ft.com)
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Plain summary
- Meta secured $12 billion to fund its Texas El Paso data center, with bond investors demanding interest rates exceeding 7%.
- This rate is about 0.4 percentage points higher than the previous $27 billion raise.
- Infrastructure providers can transfer this risk to users through long-term contracts and upfront payments, while startups often mistakenly believe they are getting discounts and end up bearing unused capacity.
- It's crucial to first review contract terms that allow exiting even if demand deviates from unit costs.
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