Blue Owl Struggles to Line Up Debt for $4B CoreWeave AI Data Center: Report
Blue Owl’s effort to line up third-party debt financing for a $4 billion AI data center project in Pennsylvania that will be occupied by CoreWeave has reportedly struggled to attract lenders.
According to a Business Insider report on Friday, the situation highlights growing caution in credit markets toward large exposures tied to fast-scaling AI infrastructure players.
Business Insider reported that Blue Owl pitched lenders in recent months but found limited appetite for financing the facility, about 80 miles west of Philadelphia in Lancaster. Some financiers cited rising concern about underwriting sizable commitments to AI-related credits viewed as weaker quality.
CoreWeave carries a below-investment-grade issuer credit rating of B+ from S&P Global Ratings, according to S&P’s published rating action. Business Insider reported that one debt-arranging executive attributed the lack of interest in the Lancaster financing to broader lender caution around AI borrowers with “less-than-sterling credit,” while a senior executive at a specialty lender described the decision succinctly: “We saw it. We passed.”
A spokesperson for Blue Owl told Business Insider that the firm had considered third-party financing “as we would with any transaction,” but said the Lancaster project is already under construction and “fully funded, on time, and on budget.” It was not clear whether Blue Owl is funding construction entirely from its own capital, leaving open questions about how the project’s capital stack ultimately will be structured.
The Lancaster campus has been marketed as a major power-and-capital commitment tied to the next wave of AI compute buildout. CoreWeave previously said it would lease an initial 100 megawatts at the site, with the potential to expand to 300 megawatts, and that it could invest up to $6 billion to outfit the facility with chips and related cloud infrastructure. A local city information page describing the project also notes that the development is in the early phases of construction on the former R.R. Donnelley printing plant site and will be leased to CoreWeave.
The financing push comes as other data-center developers—including former bitcoin miners pivoting toward AI hosting—have been tapping the debt markets to fund rising capital needs.
Cipher Mining (NASDAQ: CIFR), which has been building out its Black Pearl high-performance computing data center in Wink, Texas, recently priced $2.0 billion of 6.125% senior secured notes due 2031, saying proceeds would help finance remaining construction costs, reimburse prior equity contributions, fund debt service reserves, and pay related fees.
TeraWulf, another miner-turned-data-center developer, has also leaned on large debt raises. In October, its subsidiary priced $3.2 billion of 7.750% senior secured notes due 2030 to finance a portion of its data center expansion at its Lake Mariner campus in New York, with the security package including, among other items, a pledge by Google of warrants prior to completion of the expansion. TeraWulf later closed a separate $1.025 billion convertible senior notes offering, saying proceeds would help fund construction of a data center campus in Abernathy, Texas and for general corporate purposes.
