TL;DR
The US Securities and Exchange Commission has decided that data centres do not count as financial assets, exempting owners who bundle them into asset-backed securities from disclosure and risk obligations introduced after the 2008 crash. The clarification was sought by Latham & Watkins, a law firm heavily involved in AI infrastructure deals. It arrives as issuance across the sector accelerates.
What was relaxed, and why it was asked for
Securitisation turns a future income stream — here, rent from data centre tenants — into bonds sold today. Mortgage and car loans are the conventional collateral, and it was the securitisation of poor-quality American mortgages that detonated in 2007-08, prompting the tighter regime the SEC has now stepped back from for this asset class.
The regulator’s reasoning is that a building full of servers is not a financial asset in the first place. That sits oddly beside the marketing: Nvidia’s Jensen Huang routinely pitches data centres as an “investable asset class”, which is precisely the framing that draws capital towards them.
Raghavendra Rau, a professor at Cambridge’s Judge Business School, read the move as regulatory withdrawal in favour of market pricing. Investors worried about a concentrated tenant base or rapid obsolescence, he argued, will demand compensation in the yield regardless of what disclosure rules require.
The numbers behind the exemption
Securitisation remains a modest slice of data centre borrowing, but a fast-growing one. JP Morgan projects annual issuance reaching $30bn to $40bn, against roughly $27bn last year. Morgan Stanley expects total AI-related debt issuance of $250bn to $300bn during 2026.
The bigger figure is what sits off the books. Goldman Sachs estimates around $1.5tn in leasing commitments across the sector, of which about $1tn never appears in the financial statements of the technology giants behind them. Meta’s Hyperion project shows the mechanism: a $27bn bond raised through a special purpose vehicle, kept off Meta’s balance sheet and secured against a 20-year lease promise.
Looking forward
For UK readers the relevant question is exposure rather than jurisdiction. These bonds are bought by institutional investors globally, including pension and insurance portfolios, and the disclosure being relaxed is exactly the information a buyer would need to judge tenant concentration.
It also cuts against the direction lenders themselves have taken. Only yesterday we reported that community opposition to data centre projects is now being priced into loan terms — private markets tightening on planning risk while the public regulator loosens on disclosure. Investors are being asked to price obsolescence in an asset class whose useful life nobody has yet observed.