Applied Digital wants power guarantees from Oracle and Meta, Bloomberg says

Data centre developer Applied Digital has asked tenants including Oracle and Meta for billions of dollars in guarantees before signing leases, Bloomberg reported. The money secures power for the sites, it said, citing a person familiar with the matter.

Applied Digital is also asking chipmakers Nvidia and AMD for guarantees, the person said. These are set case by case. They usually cover the cost of grid links.

Credit ratings now decide who gets space. Applied Digital has capped how much it leases to junk-rated neoclouds such as CoreWeave, Bloomberg said. That avoids the extra utility demands tied to weaker tenants.

“Applied Digital prefers to do business with investment-grade tenants, with a preferred mix of 70% investment-grade to 30% non investment-grade,” chief executive Wes Cummins said in a statement to Bloomberg.

CoreWeave told Bloomberg its partnership with Applied Digital is strong. Meta had no comment, and Oracle declined to comment.

Utilities used to fund grid upgrades and recover the cost through rates. Now they want the biggest users to carry that cost if a project collapses. The pressure is rising after the midterms, where Democrats who campaigned on power bills won key races.

Oracle has already felt it. Wisconsin regulators require large customers rated below A- to post collateral. Oracle said its Lighthouse campus could need more than $7bn. It sued the regulator in June, then dropped the case in August.

Indiana’s Nipsco took another route. Its parent NiSource set up a separate unit, GenCo, so Amazon, Google and Microsoft pay for the power plants that serve them.

“We did not want customers to wear the liability,” NiSource executive Michael Luhrs told Bloomberg.

Nipsco has signed 5 gigawatts of GenCo deals, according to Bloomberg. NiSource puts the savings for existing customers at about $1.75bn.

The guarantees land as AI debt piles up. Hyperscalers are expected to issue $300bn to $320bn of debt this year, Barclays estimates.

Story by Alina Maria Stan

Alina Maria Stan builds connections that people actually feel. As co-founder and COO of Tekpon, she turns product intuition into real moment (show all) Alina Maria Stan builds connections that people actually feel. As co-founder and COO of Tekpon, she turns product intuition into real moments of discovery, shaping how teams find and adopt SaaS every day. Since 2020, she has led Tekpon’s brand voice, media strategy, and growth plays with a clear focus on human outcomes behind every metric. Before Tekpon, Alina followed curiosity across industries and countries. She was CEO of King Casino Bonus and led affiliate and brand strategy at Extremoo Media and Fable Media in Denmark, where she learned how to build partnerships that last. Early on, she sharpened her CRM and pricing instincts at K.H. ApS, always asking why customers choose what they choose. Her approach is rooted in more than a decade of international experience and two master’s degrees, one in Sustainable Consumption from the Technical University of Munich and one in Consumer Affairs Management from Aarhus University.