US Senators Urge Financial Watchdog to Investigate Data Center Financing Deals
January 23, 2026
A group of four Democratic U.S. Senators has formally called for a federal investigation into the complex financing structures underpinning the rapid expansion of data centers, citing concerns over potential systemic risks to the financial system and taxpayer exposure. The move highlights growing scrutiny on the massive capital flows required to build digital infrastructure for the artificial intelligence era.
In a letter sent to Treasury Secretary Scott Bessent, Senators Elizabeth Warren, Richard Blumenthal, Chris Van Hollen, and Tina Smith urged the Financial Stability Oversight Council (FSOC) to launch a formal probe. The FSOC, an interagency body created after the 2008 financial crisis and chaired by the Treasury Secretary, is tasked with monitoring threats to U.S. economic stability. The senators' request focuses on what they describe as early signs of stress in the AI debt market, warning that taxpayers could ultimately be liable for a bailout if an AI investment bubble bursts.
The push for oversight comes amid an unprecedented capital rush into digital infrastructure. A recent report by JLL estimates that approximately $3 trillion in global investment is needed to meet demand, with about $870 billion of that expected to come from debt financing. This surge has led developers and major technology firms to seek innovative, and sometimes opaque, funding mechanisms.
A specific deal cited in the senators' letter involves a $27 billion financing package arranged by Blue Owl Capital and Pimco to develop a massive data center for Meta. The project, a 2,250-acre campus in Louisiana known as Hyperion, was funded through a special purpose vehicle (SPV). This structure allowed Meta to keep the substantial debt off its corporate balance sheet. Blue Owl contributed roughly $7 billion to the joint venture, while Meta provided the land and assets under construction. Pimco issued $27 billion in investment-grade bonds backed by the project's assets.
Senator Warren criticized the SPV model, arguing it “conceals the company’s true financial condition, allowing it to appear healthier and less leveraged than it actually is and enabling it to borrow more than they otherwise could.” The Hyperion deal is noted as the largest of its kind to date under an SPV structure, but similar arrangements are reportedly being marketed as data center development accelerates.
The senators have requested that the FSOC, in collaboration with the Treasury Department, “compel data from financial institutions exposed to AI-related debt and to use its authorities to address any risks identified.” This request is part of a broader pattern of congressional concern regarding the economic externalities of data center growth. In December, several of the same senators wrote to major tech and data center companies questioning whether high energy costs from these facilities would ultimately be passed on to consumers.
The call for a probe signals a pivotal moment where regulatory attention is catching up with the breakneck pace of technological infrastructure investment, examining not just its physical footprint but also its financial architecture.
Source: bisnow
