Blue Owl struggles to get loans for CoreWeave AI data center in Lancaster

Blue Owl is having trouble getting loans for a new AI data center for CoreWeave. This is happening even though other data center projects are getting money, showing some lenders are worried about AI projects.
By Newsroom | Finance, Technology |

The expansion of data centers supporting artificial intelligence (AI) development is encountering significant financial headwinds. Blue Owl, a firm known for its creative financing structures, is reportedly facing difficulties in securing debt for a large data center project for CoreWeave. This situation raises questions about the perceived creditworthiness of AI infrastructure projects and could force Blue Owl to shoulder a substantial financial burden.

Project Financing Challenges Emerge

Blue Owl has been actively involved in financing the rapid build-out of data centers, a trend fueled by the escalating demand for AI processing power. However, recent efforts to secure debt financing for a specific CoreWeave data center project in Lancaster have met with lender resistance.

  • Blue Owl's Role: Blue Owl has been a key player in structuring deals for data center construction.

  • CoreWeave's Business: CoreWeave is a significant provider of GPU cloud services, essential for AI workloads.

  • Financing Difficulties: Reports indicate that lenders are hesitant to provide debt for the Lancaster project.

  • Potential Impact: If Blue Owl cannot secure external debt, it may have to finance the project’s construction using its own capital, a potentially substantial outlay.

Conflicting Views on Market Appetite

While recent reports suggest a pullback in lending for this specific Blue Owl-CoreWeave project, other statements indicate a strong and persistent market desire for investment in digital infrastructure.

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  • Hesitancy Cited: One lender suggested that CoreWeave's creditworthiness was a factor in the lack of interest for the Lancaster project. Concerns about rising debt levels and the sheer scale of capital needed for AI infrastructure have also been noted.

  • Market Confidence Expressed: Conversely, legal and financial professionals involved in other data center financings have highlighted a robust appetite from financial markets to invest in companies like CoreWeave.

  • Milbank, a law firm that advised lenders on a separate $600 million financing deal for a Blue Owl/CoreWeave data center, stated that "demand for digital infrastructure solutions continues to grow exponentially" and that this shows "the financial markets’ desire to invest around leading GPU/data center-focused companies like CoreWeave."

  • Newmark, which arranged $600 million in construction financing for a different Blue Owl-related data center project leased to CoreWeave, also noted the "continued appetite for innovative, large-scale digital infrastructure solutions."

  • Societe Generale provided $600 million in debt financing for a CoreWeave data center project, syndicated to a group of banks, asset managers, and credit funds, highlighting their commitment to supporting AI innovation.

Evidence of Financial Dealings

Several financial transactions involving Blue Owl and CoreWeave data centers have been publicly reported, providing a timeline of their activities in the sector.

  • December 16, 2024: Milbank announced advising lenders on a $600 million financing for a Blue Owl/CoreWeave data center. This project is situated in the Chirisa Technology Park near Richmond, Virginia, and was leased to CoreWeave. Newmark reportedly arranged this construction financing.

  • March 25, 2025: Societe Generale reported acting as Coordinating Lead Arranger for a $600 million debt financing for a data center project near Richmond, Virginia, which supported Blue Owl and is implied to be linked to CoreWeave's infrastructure needs.

  • Late 2024/Early 2025: Reports from late 2024 and early 2025 indicate that Blue Owl sought debt financing for a CoreWeave data center project in Lancaster. However, this specific financing effort appears to have encountered significant difficulties.

The Lancaster Project: A Point of Contention

The proposed 1-gigawatt data center in Lancaster, intended to support AI workloads, has become a focal point for the current financing challenges.

  • Scale of the Project: The Lancaster facility is designed to be a significant piece of AI infrastructure.

  • Blue Owl's Proposed Involvement: Blue Owl was reportedly involved in arranging financing for this project.

  • Lender Disinterest: Reports suggest that lenders were not sufficiently "sold" on the project, leading Blue Owl to potentially withdraw or reassess its backing.

  • Credit Concerns: A key reason cited for the lack of lender interest is the perceived creditworthiness of CoreWeave and the substantial capital required for such large-scale AI infrastructure.

Financial Implications and Market Signals

The difficulties in financing the Lancaster data center project send important signals about the evolving landscape of AI infrastructure investment.

  • Increased Scrutiny: Lenders appear to be applying greater scrutiny to the credit risk associated with AI data center projects, particularly those requiring massive capital commitments.

  • Blue Owl's Financial Exposure: Should Blue Owl be unable to secure external debt for the Lancaster project, the firm could face a significant financial obligation to cover construction costs itself.

  • Broader Market Concerns: The situation reflects a broader unease in the market regarding the sustainability of rapid AI infrastructure buildouts and the associated debt burdens.

Conclusion

The reported inability of Blue Owl to secure debt financing for a significant CoreWeave data center project in Lancaster highlights emerging challenges within the AI infrastructure sector. While the market for digital infrastructure is generally seen as robust, with substantial financing deals being completed for other projects, this specific instance points to potential concerns regarding credit risk and the immense capital requirements of large-scale AI data centers. The outcome for the Lancaster project will be closely watched as an indicator of future lending trends in this rapidly expanding but capital-intensive industry. Further developments will clarify whether this is an isolated event or part of a broader shift in investor sentiment.

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Frequently Asked Questions

Q: Why is Blue Owl having trouble getting loans for the CoreWeave data center in Lancaster?
Reports say lenders are worried about CoreWeave's ability to pay back loans and the high cost of building AI data centers. This makes them hesitant to lend money for the Lancaster project.
Q: What happens if Blue Owl cannot get loans for the Lancaster data center?
If Blue Owl can't find other lenders, it might have to use its own money to pay for building the data center. This could cost Blue Owl a lot of money.
Q: Are other AI data center projects getting loans?
Yes, other data center projects involving Blue Owl and CoreWeave have received large loans, like $600 million. This shows that some parts of the market still want to invest in AI infrastructure.
Q: What does this mean for AI data center building?
This situation shows that lenders are looking more closely at AI data center projects. They are concerned about the big costs and if the companies can afford the debt, which could slow down future building.
Q: When did this problem with the Lancaster data center financing start?
Reports about Blue Owl looking for loans for the Lancaster data center and facing difficulties started in late 2024 and early 2025.
Q: Where is the CoreWeave data center project that Blue Owl is having trouble financing?
The project is in Lancaster.