Morgan Stanley, one of the key players in financing the artificial-intelligence race, is considering offloading some of its data-center exposure via a so-called significant risk transfer.
The bank has held preliminary talks with potential investors about an SRT tied to a portfolio of loans to businesses involved in AI infrastructure, according to people with knowledge of the matter, who asked not to be identified because the information is confidential.
SRTs backed by data-center exposure are still a nascent slice of the credit-risk transfer market, where banks hedge their credit exposure, manage capital ratios and free up balance-sheet capacity for more lending by selling credit-linked notes to institutional investors. Morgan Stanley is also exploring other ways to hedge or syndicate part of its data-center risk, the people said, and there is no guarantee the early-stage SRT talks will result in a deal.
A representative for the New York-based bank declined to comment.
Morgan Stanley in October arranged over $27 billion of debt and about $2.5 billion of equity financing for a special-purpose vehicle tied to the development of Meta Platforms Inc.’s Hyperion data-center site in Richland Parish, Louisiana.
The bank also led three recent junk-bond offerings from TeraWulf Inc., Cipher Mining Inc., and Applied Digital Corp. in which the proceeds were earmarked in part to help finance the construction of new data-center facilities.
Morgan Stanley strategists forecast big cloud computing companies will spend about $3 trillion on data-center infrastructure projects through 2028. Cash flow can fund only about half of that, the bank estimates, with most of the rest raised via debt markets.
The lending surge may leave banks overexposed to a small group of companies.
Oracle Corp., the once stodgy database giant that’s borrowed tens of billions and tethered its fortunes to the AI boom, has seen the cost of protecting its debt against default spike in recent months. Banks and other lenders involved in financing its construction loans are likely a key driver of the surge, according to a Morgan Stanley research report.
Earlier this year, Morgan Stanley pitched an SRT tied to a portfolio of loans to private market funds. Citigroup Inc., JPMorgan Chase & Co. and Goldman Sachs Group Inc, are also among US banks that marketed SRT deals in 2025.
Global sales of SRTs are expected to expand by an average of 11% annually over the next two years, according to a Bloomberg Intelligence survey published in June.
