Pimco wants to back Oracle to realize its AI computing ambitions! A $14 billion cash injection may ease concerns over “cash flow exhaustion.”

Zhitong Finance App learned that, according to people familiar with the matter, Pacific Investment Management Co. (Pacific Investment Management Co., or Pimco) is in talks with Bank of America to help arrange about $14.0 billion in debt financing, to build a large data center for Oracle (ORCL.US) in Michigan.

If the deal is ultimately finalized, it would make this bond giant the primary source of funding support for the Saline Township park project. Oracle plans to provide computing power to OpenAI at the park. The sources said the financing could be structured in the form of bonds, and Pimco may also distribute some of the tranches to other investors.

Although negotiations with Pimco are still at an early stage, the firm’s entry marks another turning point in the long fundraising race for this project that has been closely watched by Wall Street and local residents alike, and it will test investors’ willingness to invest in a data center of this scale.

This potential major debt financing of up to $14.0 billion, together with the roughly $16.0 billion financing that Related Digital has previously helped推进 for the Michigan project, shows that institutional capital is still willing to provide large, long-term, project-level funding for Oracle-related AI data center projects. It also shows that external capital markets are willing to take on part of the cash-flow pressure of front-loading AI infrastructure investment on Oracle’s behalf. This is a significant positive for the layer that the market is most concerned about—namely, expectations that Oracle would be forced to carry huge capital expenditures on its own balance sheet in order to chase orders for the OpenAI/“Stargate” data center project, thereby keeping free cash flow under sustained pressure.

Bank of America has been raising funds for the project’s developer, Related Digital, for months. According to earlier reports, Blackstone Inc. also plans to invest an additional $2.0 billion in equity.

Representatives of Related Digital, Pimco, and Bank of America declined to comment. An Oracle spokesperson said the company is proud of the “rapid progress” it has made in financing and developing facilities in Saline Township and noted that the company is working with OpenAI, Related Digital, and Bank of America.

According to people familiar with the matter, the financing could be structured using so-called Rule 144A terms. Such bonds are private debt securities and can be traded among certain institutional investors.

For Pimco, this would be the second time in the past year it has provided substantial financing for a data center, helping the investment management firm further expand in private credit. Last year, Pimco agreed to partner with Blue Owl Capital Inc. to provide financing for Meta Platforms Inc.’s Hyperion data center project in Richland Parish, Louisiana.

As the lead arranger for the deal, Pimco holds $18.0 billion in debt at the time of pricing. After that, as debt prices surged, the company quickly booked $2.0 billion in paper profits.

The financing arrangement for the Saline Township project was pursued after lenders put together financing solutions for Oracle’s other large data centers, including a $38.0 billion debt transaction to build facilities in Texas and Wisconsin, and a $18.0 billion new Mexico project financing.

On Monday, Oracle appointed Schneider Electric SE executive Hilary Maxson as its chief financial officer to help the company manage its massive development plans and the resulting tight funding situation.