Mystery Seller Dumps $500M in Data Center Loans as AI Stocks Slide

Someone with a lot of exposure to America's AI building spree wants out fast. An unnamed holder is auctioning about $500 million of data center loans as one package, according to Bloomberg, and the timing lands days after a brutal selloff in AI and chip stocks. The seller isn't waiting around for a better market.

The batch covers roughly a dozen loans, including debt tied to operators Vantage Data Centers and CyrusOne. One $25 million slice backs Project Jupiter, a massive AI data center campus in New Mexico. That project sits inside Stargate, the AI venture run by OpenAI, Oracle and SoftBank, and Oracle is the site's main tenant.

Project Jupiter already has lenders on edge. In September, Oracle sent the site's developer a force majeure notice — a clause covering events outside a company's control — which could let Oracle delay payments if the campus misses its 2028 start date. Oracle says the project remains on its planned schedule. The site's $18 billion in loans was quoted at 89 to 91 cents on the dollar that month, meaning sellers would claw back about 90% of what they lent.

Buyers have to bid before the project clears one big hurdle. The campus still needs a state air permit for its on-site power plant, with a public hearing set for December 7, per the Albuquerque Journal. Bids are due November 19 with a $10 million minimum.

The pain spread past private loans. High-risk bonds tied to CoreWeave and Galaxy Digital, a crypto firm that also builds data centers, were among Thursday's biggest decliners. CoreWeave bonds fell as low as 78 cents on the dollar, with its 2031 unsecured debt at 79.5 cents — a discount north of 20% to face value — while its 2030 and 2032 debt plunged to yields above 15%.

This isn't a lone panic. Back in May, JPMorgan, Morgan Stanley, Sumitomo Mitsui and MUFG looked to offload pieces of their data center loans, MarketScreener reported, citing the FT — and JPMorgan and MUFG alone were trying to spread $38 billion of a single Oracle-linked deal, dwarfing this auction. Blue Owl, the developer's parent, says Oracle's notice doesn't change its financial commitments. The real answer arrives when bids close November 19.