Pacific Investment Management Co., known as Pimco, is reportedly in discussions with Bank of America to help arrange approximately $14 billion in debt financing for the construction of a major data center for Oracle in Saline Township, Michigan. Should the deal be finalized, the bond giant would become the primary financial backer for the campus project, which Oracle intends to use to provide computing power for OpenAI. Sources indicate the financing may be structured as a bond offering, with Pimco potentially distributing portions to other investors.

Although talks with Pimco are still in early stages, the firm's involvement marks a new development in the long-running effort to secure funding for this high-profile project, which is being closely watched by Wall Street and local communities. The process will test investor appetite for data center projects of this scale. This potential $14 billion debt financing, combined with a previously arranged $16 billion funding package for the Michigan project by Related Digital, signals that institutional capital remains willing to provide substantial, long-term, project-level funding for Oracle's AI data center initiatives. It also indicates that external capital markets are prepared to help shoulder the upfront cash flow pressure associated with Oracle's AI infrastructure investments.

This development is seen as a significant positive for market concerns that Oracle might be forced to heavily burden its own balance sheet with massive capital expenditures to pursue orders for OpenAI and its "Stargate" data center project, thereby sustaining pressure on its free cash flow. Bank of America has been working for months to raise capital for the project's developer, Related Digital. Previous reports indicated that Blackstone Inc. also plans to commit an additional $2 billion in equity investment. Representatives for Related Digital, Pimco, and Bank of America declined to comment.

A spokesperson for Oracle expressed pride in the "rapid progress" made in financing and developing the Saline Township facility, noting the company's collaboration with OpenAI, Related Digital, and Bank of America. According to sources, the financing might be structured under so-called Rule 144A, which pertains to private debt securities that can be traded among certain institutional investors.

For Pimco, this would mark its second major data center financing deal within a year, aiding the investment manager's further expansion into the private credit arena. Last year, Pimco agreed to partner with Blue Owl Capital Inc. to finance the Hyperion data center project for Meta Platforms Inc. in Louisiana's Richland Parish. As the lead financing arranger for that transaction, Pimco held $18 billion in debt at pricing, and subsequently saw a rapid $2 billion paper profit as debt prices surged.

The financing arrangement for the Saline Township project follows lenders assembling financing packages for other large Oracle data centers. These include a $38 billion debt deal for facilities in Texas and Wisconsin, and an $18 billion financing package for a project in New Mexico. On Monday, Oracle appointed Hilary Maxson, an executive from Schneider Electric SE, as its new Chief Financial Officer to help manage the company's extensive development plans and the associated financial pressures.