AI infrastructure financing boom is still going strong! Alphabet Inc. Class C (GOOGL.US) leads the way with data centers, market snapping up $6.7 billion in high-yield bonds.

Notice, the momentum of artificial intelligence financing is unstoppable. Recently, a record-breaking transaction involving data centers supported by Alphabet Inc. Class C (GOOGL.US), as well as a new issuance sale by cloud infrastructure company CoreWeave (CRWV.US), collectively raised $6.7 billion in new high-yield bonds. According to sources, the transaction related to Alphabet Inc. Class C - led by Morgan Stanley and with a $5.7 billion issuance size - was priced on Thursday after receiving $19 billion in investor orders. This transaction will provide funding for the construction of two data centers in a park in Sullivan County, Indiana. These data centers will be leased to cloud computing startup Fluidstack Ltd., with guarantees provided by Alphabet's Alphabet Inc. Class C. Meanwhile, cloud infrastructure company CoreWeave, just one week after its original issuance, sold an additional $1 billion in 2031 maturity bonds. The company capitalized on the continued strong demand from investors for AI-related transactions, while the conflict in the Middle East has led to other companies' borrowing plans being stalled. The rapid expansion of AI has resulted in unprecedented shortages of data center space, GPU chips, and supporting power supply. In order to raise funds for all of this, companies are tapping into every corner of the debt market, from junk bonds to project financing. Although the war has caused some borrowers to pause debt sales, Wall Street has still successfully locked in hundreds of billions of dollars in funding in recent weeks. With market optimism rising for long-term peace agreements, the borrowing costs for companies of all kinds have generally decreased, and issuance volumes have recovered as a result. High-yield bond yields have returned to pre-war levels. A joint venture, Meridian Arc HoldCo LLC, created by Next Frontier LLC and entities under Fluidstack, sold this new five-year note for the data center in Indiana. Data shows that this $5.7 billion bond issuance is the largest AI-related issuance in the US high-yield bond market, and also the largest issuance led by a single Wall Street institution. The transaction was completed successfully just one day after the official marketing began. One source stated that the bond was priced at face value with a yield of 6.25%, at the lower end of the price discussion range. This scale breaks Morgan Stanley's own record for the largest high-yield bond issuance led by a single institution. The previous record was a $3.2 billion bond issuance for cryptocurrency miner TeraWulf Inc. last year, also guaranteed by Alphabet Inc. Class C. Fluidstack assists in the development of data centers by building and operating high-performance computing infrastructure, and the business sector is thriving with the rise of artificial intelligence. The company recently announced a $50 billion deal with Anthropic to build a custom data center for the large language model manufacturer. In August last year, Fluidstack chose to expand its usage at a data center operated by TeraWulf in New York. Almost at the same time, Alphabet Inc. Class C increased its guarantee capacity for TeraWulf to $3.2 billion to support debt financing. The tech giant also increased its stake in TeraWulf to about 14%.