Blue Owl’s Stack Eyes $6 Billion Loan as Selloff Hits AI Sector

Data center company Stack Infrastructure Inc. is seeking an A$8.6 billion ($6 billion) loan, a person familiar with the matter said, in what would be a major test of investor sentiment toward AI debt in the region at a time of mounting concerns.

The company this week mandated lead arrangers, underwriters and bookrunners for the five-year loan, possibly among the biggest financings to the sector in Asia, said the person, who asked not to be identified discussing private information. Proceeds will fund Stack’s data center project in Melbourne, the person said.

A representative from Stack didn’t immediately respond to a request for comment. Alternative asset manager Blue Owl Capital Inc., which owns Stack, declined to comment.

Stack’s plan comes amid growing investor skepticism toward the artificial intelligence sector that’s fueled a selloff in both equities and bond markets this week. The deluge of debt and investments tied to AI has sparked worries that the returns may not be commensurate to the massive exposure of companies as the borrowing binge drives up costs.

MSCI Inc.’s Asia Pacific equities index fell more than 3% on Thursday, led by losses in Seoul — a bellwether for AI investment. Meanwhile, bonds of AI cloud-computing provider CoreWeave Inc. tumbled on Wednesday to levels that signal distress and the yields exceeded 15%.

AI-related debt issuance globally has reached around $578 billion this year, according to a report by Goldman Sachs Group Inc in September. Hyperscalers — the large-scale data centers that have massive computing infrastructure — account for 40% of the overall debt issuance, it said.

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While many data center operators continue to seek financing mostly through debt, there are some that have pulled fundraising plans. Nvidia Corp.-backed Firmus Grid Ltd. dropped an initial public offering this month to raise as much as $5.5 billion after investors balked at its steep increase in valuation to $30 billion.

Data center firm AirTrunk was reported to delay its planned IPO of a real estate investment trust in Singapore until next year as higher interest rates and market volatility temper investor demand.

Stack runs data centers across the Americas, Europe and Asia, including Sydney and Melbourne in Australia, according to its website. Blue Owl acquired the operator as part of its takeover of IPI Partners LLC last year.

The Denver, Colorado-based firm’s planned borrowing comes as the company is considering a partial or full sale of its assets in Australia, Japan and Malaysia, according to a Bloomberg report in May.