Morgan Stanley (MS) is weighing reducing some of its exposure to AI data centers, having held initial discussions with potential investors about a so-called significant risk transfer (“SRT”) linked to a portfolio of loans to AI infrastructure-tied firms, according to a media report on Wednesday.
An SRT involves a company shifting a portion of financial risk to another party. In AI infrastructure, the transaction is used to offload the capital and performance risks of chips and data centers so that AI firms can scale faster.
Morgan Stanley (MS) is also considering additional ways to share or protect against its data-center exposure, Bloomberg reported, citing people with knowledge of the matter. The preliminary SRT talks may not lead to a deal, the report said, adding a Morgan Stanley representative declined to comment.
In October, the investment bank was said to have arranged more than $27B in debt and ~$2.5B in equity for a special-purpose entity linked to Meta Platforms’ (META) Hyperion data center project in Louisiana. It also recently led three high-yield bond deals for TeraWulf (WULF), Cipher Mining (CIFR) and Applied Digital (APLD), with the proceeds earmarked in part to help fund data-center construction.