JPMorgan to Lend More Than $7 Billion For OpenAI Data Center
Loan means giant data center project involving Oracle and Crusoe is fully funded.
The Takeaway
• JPMorgan loan would round out funding for data center project
• Bank has already lent $2.3 billion for the first two Abilene, Texas., data centers
• Campus is part of Stargate effort involving Oracle, OpenAI and SoftBank
JPMorgan Chase has agreed to lend more than $7 billion to the firms building OpenAI’s giant artificial intelligence data center campus in Abilene, Tex., according to two people with direct knowledge of the deal.
The deal with JPMorgan, which has not been previously reported, reflects continued interest from lenders and investors in backing the physical infrastructure needed to develop advanced AI software.
The bank already lent $2.3 billion to the companies developing the Abilene data center, which funded the initial phase of the project. The new $7 billion loan will round out the funding for the construction of the data center, which would be one of the largest in the world, with eight buildings that cost $1.4 billion each. The data centers can hold a total of 400,000 Nvidia chips.
The project is being developed by a group of companies and will be used by OpenAI. The actual project is being built by data center developer Crusoe, and it is partly owned by asset manager Blue Owl and Primary Digital Infrastructure, an investment fund. Oracle has agreed to lease it for 15 years. Oracle will then rent the chips to OpenAI. At full capacity, the site is expected to have more than 1 gigawatt of power for AI chips.
JPMorgan, Crusoe and Primary Digital declined to comment. Oracle and Blue Owl did not respond to requests for comment.
OpenAI plans to use the campus to train its AI models. OpenAI used to exclusively rely on Microsoft, a major backer of OpenAI, for data center capacity. But the startup grew impatient with the tech giant last year because it wasn’t getting chips fast enough. The Abilene site was the first example of OpenAI deciding to work with another cloud provider—Oracle—to get Nvidia GPUs.
The developers of the data center have already moved to expand the joint venture that owns the project to build additional AI data centers. Crusoe, Blue Owl and Primary Digital said Tuesday they had raised another $11.6 billion for the expansion. The funding primarily comes from Blue Owl, according to someone involved in the deal.
The lending and fundraising signal that there is little fear among investors about overspending on AI. On Wednesday, data center builder CoreWeave raised $2 billion in a high-yield bond offering.
Lenders seem particularly hungry for projects that have a long-term, credit worthy tenant, in this case Oracle. The company signed the initial lease for two buildings last year and expanded to the entire site in January.
OpenAI CEO Sam Altman, SoftBank’s Masayoshi Son and Oracle’s Larry Ellison have said the Abilene campus is a part of their $500 billion data center effort, called Stargate. But so far none of the funding has come from SoftBank. The loan from JPM does not cover the cost of the GPUs. The details of SoftBank’s involvement in the Abilene project is still being worked out, according to someone with direct knowledge.
The massive Abilene project was started by Crusoe, which later formed a $3.4 billion joint venture with Blue Owl and Primary Digital Infrastructure to fund the OpenAI data center last fall. The joint venture later raised $2.3 billion in construction debt from JPMorgan, enough money to fund the initial build out of two data centers for Oracle that could hold 100,000 GPUs for OpenAI.
The project grew in January when Crusoe signed an larger lease agreement with Oracle for 6 more data centers, covering the entire 1.2 gigawatt site, The Information first reported. The deal quadrupled the amount of capacity Oracle could provide to OpenAI, adding an additional 300,000 GPUs. The original joint venture with Blue Owl did not cover the expansion.