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AI Boom Fuels $7B Data Center Lease
24 Apr
Summary
- Hut 8 plans a 245-megawatt facility in Louisiana.
- A 15-year lease with Fluidstack is valued at $7 billion.
- Google provides a financial backstop for the project.
Hut 8 Corp. is planning a significant expansion into the investment-grade debt market to finance a new data center facility. This 245-megawatt project, located in St. Francisville, Louisiana, is poised to generate substantial revenue through a 15-year lease agreement with cloud-computing startup Fluidstack Ltd., estimated to be worth around $7 billion. Google is providing a crucial financial backstop to ensure lease payments and other obligations are met. Goldman Sachs Group Inc., JPMorgan Chase & Co., and Morgan Stanley have been enlisted to arrange investor calls for a potential bond sale exceeding $3 billion in the coming days. This move underscores the broader trend of data center developers tapping diverse debt markets to meet the escalating demand for AI infrastructure. Earlier, a Google-backed project also involving Fluidstack successfully raised $5.7 billion through a junk-bond sale. Financial rating agencies Fitch and S&P are expected to rate Hut 8's notes at BBB-, just above junk status. Entergy Corp.'s subsidiary will supply electricity for the facility.
