Goldman Sachs: AI data centers need new financing as costs soar

Goldman Sachs has identified a fundamental shift in AI infrastructure financing, with data center developers adopting “creative financing structures” to attract long-term institutional capital like pension and insurance funds. This evolution reflects how the massive scale and complexity of AI infrastructure is forcing the financial industry to develop new funding mechanisms, potentially opening up billions in previously untapped investment sources.

Why this matters: The astronomical costs of AI infrastructure are creating financing bottlenecks that traditional banking methods can’t adequately address, forcing the entire financial ecosystem to adapt.

The big picture: Historical transformative technologies have consistently required new financing approaches, and AI infrastructure is following the same pattern due to its unprecedented scale and complexity.

Key financing innovations: Data center developers are bundling different components of infrastructure builds under unified investment structures to attract institutional investors seeking stable, long-term returns.

• These new contract structures are being designed to match the risk profiles of traditional investment-grade bonds.
• The evolution could “drastically expand” the pool of potential financiers beyond traditional tech investors.

What they’re saying: “The market is evolving, and contracts are evolving in a way that makes some of these contracts a similar level of credit risk or equity risk to traditional investment-grade bonds,” Jason Tofsky, a tech and media managing director in Goldman’s investment banking division, told Semafor.

Outsourcing trend: Goldman expects hyperscalers to increasingly outsource data center construction and maintenance to third-party providers like QTS, Digital Realty, and Equinix, despite operating their own facilities.

• This shift helps companies get online faster, even though they maintain internal data center capabilities.
• The trend represents a strategic trade-off between speed-to-market and direct operational control.

The bottom line: The insatiable demand for AI technologies is forcing entire business models and financial systems to evolve, demonstrating how transformative innovations reshape not just industries but the capital structures that fund them.