From CLOs to ATMs, Wall Street Finds More Ways to Fund AI

For the past two years, funding the artificial intelligence boom has often felt like a race where the main constraint was the size of the checkbook. But as the industry moves from theoretical planning to the reality of building gigawatt-scale data centers, the financing is getting more complicated.

To keep the money flowing, developers and their Wall Street advisors are searching for corners of the financial system that can absorb large projects. AI borrowers have tapped the $3.5 trillion Rule 144A private bond market, where some developers can finance as much as 95% of a project’s cost. Banks including Morgan Stanley have also pitched the $1.4 trillion leveraged loan market, whose biggest buyers include CLO managers, as another home for AI-related debt.