Data center operators secure billions in bank guarantees to fund massive AI buildout

Building AI infrastructure is expensive. Powering it might be even more expensive. And now, data center operators are getting creative with how they pay the electric bill. QTS, the Blackstone-backed data center giant, approached roughly a dozen banks in late April to arrange approximately $2 billion in guaranteed utility payments. The goal: lock down the massive electricity supplies needed to scale AI operations without immediately dipping into traditional debt markets. Not to be outdone, Switch Inc., backed by DigitalBridge, assembled its own $2.6 billion bank pledge, reportedly a first-of-its-kind structure in the industry. A new playbook for paying the power bill Unlike traditional bank guarantees, surety bonds don’t require operators to post collateral. They also come with payout timelines as short as 10 business days. In English: operators get to keep their cash free for actual construction while still proving to utilities they’re good for the money. It’s a meaningful efficiency gain when you’re talking about billions in capital deployment. QTS and Switch lead the charge QTS has been on an absolute tear since Blackstone acquired it in 2021. The company has grown its leased cap...