Banks lend $18 billion for Oracle-tied data center project, Bloomberg News reports

(Reuters) -A consortium of around 20 banks is providing a project finance loan of about ​$18 billion to support the construction of a data center ‌campus linked to Oracle in New Mexico, Bloomberg News reported on Friday.

Sumitomo ‌Mitsui Banking Corp, BNP Paribas SA, Goldman Sachs Group, and Mitsubishi UFJ Financial Group are administrative agents on the deal, the report said, citing people with knowledge of the ⁠matter.

The four lead banks have ‌enlisted other banks and will now sell the debt to additional banks and institutional investors through a ‍retail syndication process, with commitments expected by late November, according to the report.

U.S. tech firms are ramping up investments in data ​centers to meet soaring demand for computing power, driven ‌by increasingly complex artificial intelligence models such as OpenAI’s ChatGPT.

The New Mexico data center campus is part of the Stargate initiative, a $500 billion push to build AI infrastructure across the U.S., led by OpenAI, SoftBank Group and ⁠Oracle, the report said, adding ​that Oracle is expected to be ​a tenant at the new site.

Pricing is being discussed at 2.5 percentage points over the secured overnight financing ‍rate and the ⁠loan is expected to carry a four-year maturity, with two one-year extension options, according to the ⁠report.

The bank quartet and Oracle did not immediately respond to Reuters’ requests ‌for comment.

(Reporting by Pritam Biswas in ‌Bengaluru; Editing by Shilpi Majumdar)