Investors are demanding yields exceeding Oracle's corporate bonds by over one percentage point for a $14bn debt offering tied to a Michigan data center project, reflecting heightened risk perceptions around big tech's AI spending spree. The financing, led by Bank of America, supports a 1GW facility in Saline Township under Oracle's $300bn agreement with OpenAI to deliver 4.5GW of computing power. Critics question Oracle's ability to guarantee repayment if project delays occur or if the tech giant exits the lease, as it remains a tenant rather than joint owner.

While banks traditionally dominated data center financing, the $14bn scale has shifted investors toward project bonds with longer maturities. Blackstone's $2bn equity commitment and Pimco's anchor role highlight institutional appetite despite concerns about Oracle's creditworthiness. The deal's structure—issuing debt through a special purpose vehicle rather than Oracle's balance sheet—aims to mitigate worries about the company's growing $25bn bond market reliance.

Industry analysts note this marks a new asset class with no established pricing models, as Katie DeSplinter of Capital Group observes: 'There is no quant model for us to calculate what is a good relative value.'.