Banks are now trying to offload the AI data center debt they just underwrote
Major banks including JPMorgan and Morgan Stanley are attempting to offload debt associated with AI data center projects due to internal risk limits. The struggle to sell these large-scale loans suggests growing market skepticism regarding the long-term financial viability of the AI infrastructure boom.
Why it matters
The cooling of bank appetite for AI-linked debt could signal a broader correction in the AI investment bubble.
JPMorgan, Morgan Stanley, SMBC and MUFG are quietly shopping pieces of the AI debt pile they helped build, a sign the lenders closest to the money have started hedging their own bet.
Six months ago, banks were racing each other to underwrite data center loans tied to Oracle, Meta and the rest of the AI buildout. Now some of the same banks are trying to get that debt off their books. JPMorgan, Morgan Stanley, SMBC and MUFG have been exploring significant risk transfers, according to a report from the Financial Times. These are deals that let a bank keep a loan on paper while shifting its riskiest slice to outside investors. The banks are doing this because they are bumping up against internal limits on how much AI-linked exposure any one lender can hold.
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