TMTB EOD Wrap

QQQs -1.8% / SPX -1.15% as Tech was hit hard after the FT reported that Blue Owl had withdrawn from providing financial backing to ORCL/OAI DC in Michigan (ORCL -5% told Bloomberg after the news that the Michigan project was on track w/equity partners aside from Blue Owl on board. But damage was done).

The financing hiccup is another good reminder of one of the things currently plaguing the AI trade: it’s now also a financing story, not just a demand one: the pace of DC buildouts is gated by who can underwrite massive up-front capex at acceptable lease terms and construction risk. It’s not just public mkt investors that are scrutinizing their AI positions more closely after Sam’s Splurge: BlueOwl pulling back signals a higher bar for capital and tighter underwriting (in other words: more scrutiny on counterparty/lease structure, less tolerance for “growth-at-any-cost”).

Obviously bad for Neoclouds (NBIS -7% / CRWV -7%) that rely on external project financing. Less capex buildout is cle…