Discussions led by Morgan Stanley are underway to secure $15 billion in debt financing for an Anthropic data center in Texas, with Google, an Alphabet Inc. subsidiary, acting as a backstop. The debt package includes a $14 billion bridge loan plus a revolving credit facility for Nexus Data Centers, the project's developer.
Google will obtain an approximately 20% equity interest in the Hubbard, Texas project, and has committed to covering billions in lease and power costs should Anthropic default.
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The plan calls for the campus to house a power plant and be outfitted with chips co-created by Google and Broadcom, which Anthropic intends to deploy.
Nexus Data Centers will oversee construction and operation of the campus, which is designed to support high-density computing. The on-site power plant will provide dedicated electricity, essential for continuous AI model training.
Spokespeople for Morgan Stanley, Google, and Anthropic each declined to provide a statement. The transaction, which could be announced as early as today, was previously covered by The Wall Street Journal. A person familiar with the matter said, "The Hubbard project is expected to cost billions beyond the debt package, with Google's equity stake and payment guarantees providing crucial credit enhancement." This arrangement represents the most recent collaboration among these companies to fund AI infrastructure expansion.
In a deal earlier this year, Anthropic secured a financing package valued at about $35 billion - among the largest private credit deals ever - to buy Google's proprietary TPU chips. Morgan Stanley advised Broadcom, which was selected to guarantee payments on the senior-most tranches of that debt. That earlier financing was largely supplied by private credit funds, reflecting the growing role of alternative asset managers in large-scale AI projects.
Such financing structures are becoming increasingly common as tech giants and lenders collaborate to share the risk of building massive AI data centers. These arrangements allow tech companies to offload some financial risk while securing the enormous capital needed.
For banks, the involvement of a creditworthy partner like Google makes the debt more attractive, potentially leading to favorable terms. This mirrors a broader trend where major AI firms like Anthropic secure funding through a combination of bank debt, private credit, and strategic partner commitments.
The structure of the Hubbard financing reflects a broader shift in how AI companies fund capital-intensive projects. Increasingly, firms are blending traditional bank loans with private credit and strategic equity stakes from cloud partners such as Google. This approach allows AI startups to access massive capital without excessively diluting existing shareholders, while banks gain protection from creditworthy backstops. The lead role of Morgan Stanley also highlights Wall Street's growing appetite for AI-related debt, even as interest rates remain elevated.
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