"We Saw It. We Passed": Blue Owl Fails To Secure Third Party Funding For $4 Billion Data Center

As we discussed extensively yesterday, Blue Owl already has huge headaches with its software exposure, being forced to dump a substantial amount of its SaaS-linked loans (to related parties among others) as it gates retail investors in its private credit fund amid a tsunami of redemption requests. We now learn that the massive private credit asset manager is also facing major hardware challenges too. 

According to Insider, Blue Owl - which is also a leading investor in the data center boom funding countless projects with private loans - was unable to arrange financing for a $4 billion data center it is co-developing in Pennsylvania after pitching lenders to help bankroll the project in recent months.

The facility, located in Lancaster county 80 miles west of Philadelphia, will be occupied by CoreWeave, a junk-rated provider of cloud computing services that has become a closely watched name in the AI race for its rapid expansion due to the massive debt load it took on to fund that expansion which has sent its credit default swaps to record wides.

CoreWeave's Lancater data center: Photo: Bloomberg/Getty Images

An executive who arranges debt for major data center deals told Insider that the lack of interest in the Lancaster project was due to growing caution among lenders and investors about taking on sizable exposures to AI players with less-than-sterling credit. CoreWeave  has a junk rating of B1/B+, according to S&P and Moodys

"We saw it. We passed," a senior executive at a large specialty lender told Insider.

A Blue Owl spokesman said that the company had "considered" third-party financing for the Lancaster project "as we would with any transaction as we explore alternatives before choosing the most attractive path forward." This suggests that not only was Blue Owl unwilling to fund the project internally, but when it tried to syndicate the private loan, the phone calls went straight to voicemail. 

Understandably, already sweating under the spotlight of the market which has sent its stock price crashing in recent weeks, the Blue Owl spokesman added that the project, which he said is already under construction, "is fully funded, on time, and on budget." It wasn't immediately clear who had "funded" the project is, as Insider reports, 3rd party lenders had balked while Blue Owl itself was aggressively dumping its own software exposure.

To that point, Insider notes that it is unclear whether Blue Owl has been funding construction entirely from its own capital. If Blue Owl is unable to raise debt for the Lancaster development, the company - already facing massive redemption requests across its various funds - would be on the hook for a potentially huge outlay of cash to pay for the data center's construction.

The situation shows the complications and risks involved in financing the massive buildout of infrastructure for AI computing. Brennan Hawken, an equity analyst at BMO Capital Markets who covers Blue Owl, said that difficulties to raise debt for the Lancaster project would raise concern.

"I'm not familiar with this deal, but if there is a struggle to find the debt financing, that's a bit of a red flag that I would want to drill into," Hawken said.

How we got here

Last summer, CoreWeave announced it would lease 100 megawatts of initial capacity at the Lancaster data center and potentially expand its commitment to 300 megawatts. The company said it would pour up to $6 billion into the project to equip it with chips and other cloud infrastructure. A month later, in August, Chirisa Technology Parks announced it would partner with Blue Owl and Machine Investment Group to develop the project. The partnership said it would provide $4 billion of funding, an amount separate from CoreWeave's investment, to support the construction of the project's data center facilities. 

In the fall, Blue Owl began shopping the development to potential lenders, a person familiar with that effort told Insider. 

Blue Owl has been one of the more "creative" financial architects of the data center building boom. Last year, it structured an off-balance sheet deal to partner with Meta in the ownership of a large data center campus that Meta will build and operate in Louisiana.

As a reminder, META is already neck deep in off-balance sheet debt. Here is a schematic of its $27.3 billion SPV with Blue Owl "Project Beignet" for the Hyperion data center. None of this touches META's balance sheet.

Expect hundreds of billions of these in 2026 https://t.co/794EgSiiZ9 pic.twitter.com/7hMyVW6Lno

— zerohedge (@zerohedge) January 29, 2026

Blue Owl piggybacked on Meta's strong credit to raise $27.3 billion of investment-grade corporate bonds against its share of the project's equity, proceeds that will be used to help pay for construction.

Blue Owl could arrange a similar type of vehicle that could attempt to tap the credit of an investment-grade customer of CoreWeave's who might use the Lancaster facility or Nvidia, the chipmaker that has purchased large stakes in CoreWeave. It could also potentially raise cash for construction debt by tapping large institutional investor clients to pool together a loan, Hawken said.

Much of the development of hyperscale data center campuses has sought to utilize the strong credit ratings and deep pockets of big-tech partners.

Coreweave's data center challenges are only the latest hurdle that the AI supercycle is facing now that the market has realized the trillions in future funding needs will have to be largely filled with debt, including government funding (See "It Will Take $5 Trillion To Fund The AI Cycle, And The US Government Is On The Hook For Over $1 Trillion")

Insider previously reported that major banks had recent difficulty selling off pieces of $38 billion of debt to finance the construction of two data center campuses that will be anchored by Oracle. Banks often sell pieces of such large commitments to other lenders to spread risk and also reap a quick profit.

The slowdown in interest in participating in that financing was due to worries about Oracle's enormous AI spending and whether the tech company's credit rating could be impacted by those outlays. Oracle has since sought to calm the lending market, announcing that it would raise up to $50 billion of cash from stock and bond offerings in order to "maintain a solid investment-grade balance sheet."

Blue Owl stocks tumbled at the open to a fresh multi-year low, although it wasn't clear if that was due to the Coreweave news or because of its mutiple other issues. Coreweave's dump today, on the other hand, can likely be attributed largely to the data center news which, unless it manages to find a generous partner, will only be the start of its headaches. 

 

Tyler Durden Fri, 02/20/2026 - 13:35

"We Saw It. We Passed": Blue Owl Fails To Secure Third Party Funding For $4 Billion Data Center

As we discussed extensively yesterday, Blue Owl already has huge headaches with its software exposure, being forced to dump a substantial amount of its SaaS-linked loans (to related parties among others) as it gates retail investors in its private credit fund amid a tsunami of redemption requests. We now learn that the massive private credit asset manager is also facing major hardware challenges too. 

According to Insider, Blue Owl - which is also a leading investor in the data center boom funding countless projects with private loans - was unable to arrange financing for a $4 billion data center it is co-developing in Pennsylvania after pitching lenders to help bankroll the project in recent months.

The facility, located in Lancaster county 80 miles west of Philadelphia, will be occupied by CoreWeave, a junk-rated provider of cloud computing services that has become a closely watched name in the AI race for its rapid expansion due to the massive debt load it took on to fund that expansion which has sent its credit default swaps to record wides.

CoreWeave's Lancater data center: Photo: Bloomberg/Getty Images

An executive who arranges debt for major data center deals told Insider that the lack of interest in the Lancaster project was due to growing caution among lenders and investors about taking on sizable exposures to AI players with less-than-sterling credit. CoreWeave  has a junk rating of B1/B+, according to S&P and Moodys

"We saw it. We passed," a senior executive at a large specialty lender told Insider.

A Blue Owl spokesman said that the company had "considered" third-party financing for the Lancaster project "as we would with any transaction as we explore alternatives before choosing the most attractive path forward." This suggests that not only was Blue Owl unwilling to fund the project internally, but when it tried to syndicate the private loan, the phone calls went straight to voicemail. 

Understandably, already sweating under the spotlight of the market which has sent its stock price crashing in recent weeks, the Blue Owl spokesman added that the project, which he said is already under construction, "is fully funded, on time, and on budget." It wasn't immediately clear who had "funded" the project is, as Insider reports, 3rd party lenders had balked while Blue Owl itself was aggressively dumping its own software exposure.

To that point, Insider notes that it is unclear whether Blue Owl has been funding construction entirely from its own capital. If Blue Owl is unable to raise debt for the Lancaster development, the company - already facing massive redemption requests across its various funds - would be on the hook for a potentially huge outlay of cash to pay for the data center's construction.

The situation shows the complications and risks involved in financing the massive buildout of infrastructure for AI computing. Brennan Hawken, an equity analyst at BMO Capital Markets who covers Blue Owl, said that difficulties to raise debt for the Lancaster project would raise concern.

"I'm not familiar with this deal, but if there is a struggle to find the debt financing, that's a bit of a red flag that I would want to drill into," Hawken said.

How we got here

Last summer, CoreWeave announced it would lease 100 megawatts of initial capacity at the Lancaster data center and potentially expand its commitment to 300 megawatts. The company said it would pour up to $6 billion into the project to equip it with chips and other cloud infrastructure. A month later, in August, Chirisa Technology Parks announced it would partner with Blue Owl and Machine Investment Group to develop the project. The partnership said it would provide $4 billion of funding, an amount separate from CoreWeave's investment, to support the construction of the project's data center facilities. 

In the fall, Blue Owl began shopping the development to potential lenders, a person familiar with that effort told Insider. 

Blue Owl has been one of the more "creative" financial architects of the data center building boom. Last year, it structured an off-balance sheet deal to partner with Meta in the ownership of a large data center campus that Meta will build and operate in Louisiana.

As a reminder, META is already neck deep in off-balance sheet debt. Here is a schematic of its $27.3 billion SPV with Blue Owl "Project Beignet" for the Hyperion data center. None of this touches META's balance sheet.

Expect hundreds of billions of these in 2026 https://t.co/794EgSiiZ9 pic.twitter.com/7hMyVW6Lno

— zerohedge (@zerohedge) January 29, 2026

Blue Owl piggybacked on Meta's strong credit to raise $27.3 billion of investment-grade corporate bonds against its share of the project's equity, proceeds that will be used to help pay for construction.

Blue Owl could arrange a similar type of vehicle that could attempt to tap the credit of an investment-grade customer of CoreWeave's who might use the Lancaster facility or Nvidia, the chipmaker that has purchased large stakes in CoreWeave. It could also potentially raise cash for construction debt by tapping large institutional investor clients to pool together a loan, Hawken said.

Much of the development of hyperscale data center campuses has sought to utilize the strong credit ratings and deep pockets of big-tech partners.

Coreweave's data center challenges are only the latest hurdle that the AI supercycle is facing now that the market has realized the trillions in future funding needs will have to be largely filled with debt, including government funding (See "It Will Take $5 Trillion To Fund The AI Cycle, And The US Government Is On The Hook For Over $1 Trillion")

Insider previously reported that major banks had recent difficulty selling off pieces of $38 billion of debt to finance the construction of two data center campuses that will be anchored by Oracle. Banks often sell pieces of such large commitments to other lenders to spread risk and also reap a quick profit.

The slowdown in interest in participating in that financing was due to worries about Oracle's enormous AI spending and whether the tech company's credit rating could be impacted by those outlays. Oracle has since sought to calm the lending market, announcing that it would raise up to $50 billion of cash from stock and bond offerings in order to "maintain a solid investment-grade balance sheet."

Blue Owl stocks tumbled at the open to a fresh multi-year low, although it wasn't clear if that was due to the Coreweave news or because of its mutiple other issues. Coreweave's dump today, on the other hand, can likely be attributed largely to the data center news which, unless it manages to find a generous partner, will only be the start of its headaches. 

 

Tyler Durden Fri, 02/20/2026 - 13:35

Oakland Mayor, Who Supported 'Defund The Police' Has Her Car Stolen

Authored by Luis Cornelio via Headline USA,

An alleged thief stole Oakland Mayor Barbara Lee’s city-owned vehicle after breaking into her office just two days earlier, according to the California edition of the New York Post. 

The Oakland Police Department recovered the vehicle within hours, two days after somebody tampered with her office’s door. 

“The Oakland Police Department is investigating the theft of a city-owned vehicle. On February 17, 2026, OPD was notified that the vehicle was stolen from Oakland City Hall,” the OPD said through a spokesperson.

“The vehicle was recovered within hours. OPD is following up on potential leads.” 

Lee took office in May 2025 after serving more than two decades in Congress.

She previously expressed support for efforts to “restructure” and “overhaul” policing during the 2020 protests, language widely associated with the “defund the police” movement. 

In 2020, she told Politico she was “really proud” of the Minneapolis City Council’s pledge to defund the local police. 

In December 2020, she also said, “We have to restructure our funding priorities in terms of how we make our communities safe.” 

“We have seen video after video over the last few weeks of peaceful protestors being met with extreme violence from police,” Lee said during the 2020 protest in favor of George Floyd.

“We can’t wait. It’s time to overhaul our policing system.”  

According to the New York Post, police already had an arrest warrant for the alleged suspect.  

In a statement, Lee claimed her administration takes crimes seriously:  

“As with criminal cases such as this, the Oakland Police Department is actively investigating, and we cannot comment further at this time. No one in Oakland should have to worry about their car being stolen, whether they’re a resident, a city worker, or the Mayor. Public safety is a priority across our entire city.” 

The theft comes amid a broader problem for Oakland as the city reported 9,914 motor vehicle thefts in 2024, one of the highest rates in the country. 

Tyler Durden Fri, 02/20/2026 - 13:20

Oakland Mayor, Who Supported 'Defund The Police' Has Her Car Stolen

Authored by Luis Cornelio via Headline USA,

An alleged thief stole Oakland Mayor Barbara Lee’s city-owned vehicle after breaking into her office just two days earlier, according to the California edition of the New York Post. 

The Oakland Police Department recovered the vehicle within hours, two days after somebody tampered with her office’s door. 

“The Oakland Police Department is investigating the theft of a city-owned vehicle. On February 17, 2026, OPD was notified that the vehicle was stolen from Oakland City Hall,” the OPD said through a spokesperson.

“The vehicle was recovered within hours. OPD is following up on potential leads.” 

Lee took office in May 2025 after serving more than two decades in Congress.

She previously expressed support for efforts to “restructure” and “overhaul” policing during the 2020 protests, language widely associated with the “defund the police” movement. 

In 2020, she told Politico she was “really proud” of the Minneapolis City Council’s pledge to defund the local police. 

In December 2020, she also said, “We have to restructure our funding priorities in terms of how we make our communities safe.” 

“We have seen video after video over the last few weeks of peaceful protestors being met with extreme violence from police,” Lee said during the 2020 protest in favor of George Floyd.

“We can’t wait. It’s time to overhaul our policing system.”  

According to the New York Post, police already had an arrest warrant for the alleged suspect.  

In a statement, Lee claimed her administration takes crimes seriously:  

“As with criminal cases such as this, the Oakland Police Department is actively investigating, and we cannot comment further at this time. No one in Oakland should have to worry about their car being stolen, whether they’re a resident, a city worker, or the Mayor. Public safety is a priority across our entire city.” 

The theft comes amid a broader problem for Oakland as the city reported 9,914 motor vehicle thefts in 2024, one of the highest rates in the country. 

Tyler Durden Fri, 02/20/2026 - 13:20

Goldman's Meeting With Top Memory Supplier Points To Higher Prices As Crunch Worsens

The high-bandwidth memory (HBM) shortage is already pressuring the margins of consumer electronics companies, disrupting product launches, and pushing up the prices of TVs and computers. The latest development is Valve's handheld gaming PC, which is reportedly out of stock in select regions as the memory crunch now filters into retail availability.

We have been leaning on institutional channel checks across the semis and hardware coverage universe to gain an insider's perspective on what's happening across the memory space and what to potentially expect in the quarters ahead.

The latest read comes from Goldman analysts led by Giuni Lee, following a discussion with SK Hynix, a critical supplier of HBM chips, on the implications of a very tight memory market.

Lee offered clients five key takeaways from her conversation with SK Hynix:

1. Memory pricing is likely to growth throughout this year driven by real demand and tight supply,

2. Healthy inventory levels and strengthening supplier leverage are leading to increased discussions around longer term contracts,

3. The current tight conventional DRAM S/D could lead to more favorable terms for HBM business in 2027,

4. The 1c nm ramp in 2026 mainly for conventional DRAM, while for HBM mainly starting from 2027, and

5. Capex guidance and focus on DRAM/HBM investments are largely inline with GSe. We reiterate our Buy rating on Hynix

On the memory market, Lee delivered clients a detailed readout on current conditions:

Memory pricing growth likely throughout this year driven by real demand and tight supply

Hynix thinks the current memory pricing uptrend could continue throughout this year driven by robust demand from AI customers. The company expects AI customers will continue to maintain sizable investment scale as they are making meaningful progress in their AI services. While the company acknowledged potential despeccing from PC/mobile customers could weigh on memory demand, it still expects upward pricing trajectory also led by limited supply growth. The company mentioned that the industry-wide limited clean room space is contributing to tight supply and favorable condition for memory pricing. The company sees low possibility of meaningful double-booking of memory orders, as customers are aware that memory capacity cannot be increased meaningfully in the short-term, hence they recognize double-booking will not lead to more allocation but rather drive up pricing further.

The rest of Lee's takeaways from her discussion with SK Hynix are available on the Marketdesk.ai portal for professional subscribers.

Tyler Durden Fri, 02/20/2026 - 12:40

Goldman's Meeting With Top Memory Supplier Points To Higher Prices As Crunch Worsens

The high-bandwidth memory (HBM) shortage is already pressuring the margins of consumer electronics companies, disrupting product launches, and pushing up the prices of TVs and computers. The latest development is Valve's handheld gaming PC, which is reportedly out of stock in select regions as the memory crunch now filters into retail availability.

We have been leaning on institutional channel checks across the semis and hardware coverage universe to gain an insider's perspective on what's happening across the memory space and what to potentially expect in the quarters ahead.

The latest read comes from Goldman analysts led by Giuni Lee, following a discussion with SK Hynix, a critical supplier of HBM chips, on the implications of a very tight memory market.

Lee offered clients five key takeaways from her conversation with SK Hynix:

1. Memory pricing is likely to growth throughout this year driven by real demand and tight supply,

2. Healthy inventory levels and strengthening supplier leverage are leading to increased discussions around longer term contracts,

3. The current tight conventional DRAM S/D could lead to more favorable terms for HBM business in 2027,

4. The 1c nm ramp in 2026 mainly for conventional DRAM, while for HBM mainly starting from 2027, and

5. Capex guidance and focus on DRAM/HBM investments are largely inline with GSe. We reiterate our Buy rating on Hynix

On the memory market, Lee delivered clients a detailed readout on current conditions:

Memory pricing growth likely throughout this year driven by real demand and tight supply

Hynix thinks the current memory pricing uptrend could continue throughout this year driven by robust demand from AI customers. The company expects AI customers will continue to maintain sizable investment scale as they are making meaningful progress in their AI services. While the company acknowledged potential despeccing from PC/mobile customers could weigh on memory demand, it still expects upward pricing trajectory also led by limited supply growth. The company mentioned that the industry-wide limited clean room space is contributing to tight supply and favorable condition for memory pricing. The company sees low possibility of meaningful double-booking of memory orders, as customers are aware that memory capacity cannot be increased meaningfully in the short-term, hence they recognize double-booking will not lead to more allocation but rather drive up pricing further.

The rest of Lee's takeaways from her discussion with SK Hynix are available on the Marketdesk.ai portal for professional subscribers.

Tyler Durden Fri, 02/20/2026 - 12:40

Meta's AI Would Like To Keep You Posting After You're Dead

Ever since social media became a fixture of daily life, an uncomfortable question has lingered: what should happen to someone’s account after they die? Leave it frozen in time? Hand it to family members as a memorial? Or quietly let it fade into the algorithm?

A few years ago, Meta Platforms explored a far more ambitious possibility, according to Futurism. In 2023, the company received a patent describing how a large language model could be trained on a user’s past posts to simulate their voice and behavior — keeping an account active if the person were “absent,” including in the event of death. The filing, led by CTO Andrew Bosworth, outlined how such a system could generate posts, comments, likes, and even private messages in the user’s style.

The idea was striking, and for many, unsettling. Meta has since said it has no plans to move forward with that example. But the patent offers a snapshot of a moment when tech companies were aggressively testing the limits of what generative AI might do — including extending a person’s digital presence beyond their lifetime.

The Futurism piece says that the concept isn’t entirely theoretical. A small but growing “grief tech” sector has promoted AI tools that recreate voices or personalities of the deceased using photos, recordings, and written messages. Proponents argue that such tools could offer comfort. Critics worry they could complicate the grieving process.

Even within Meta’s own public comments, there has been ambivalence. CEO Mark Zuckerberg has spoken about AI companions as a way to address loneliness and, in a 2023 interview with podcaster Lex Fridman, suggested that interacting with digital representations of loved ones might help some people cope with loss. He also acknowledged the psychological risks and the need for deeper study.

The business logic behind such experiments is difficult to ignore. Platforms like Facebook are filled with dormant accounts — profiles that remain but are rarely updated. More AI-generated activity could mean more engagement and more data. As University of Birmingham law professor Edina Harbinja observed, the commercial incentive is clear, even if the ethical path forward is not.

Others urge caution. University of Virginia sociologist Joseph Davis has argued that part of grieving involves confronting the reality of loss, not blurring it with simulations.

Meta has distanced itself from the patent’s more provocative scenario. Still, its existence underscores how far companies have been willing to push generative AI — and how complex the questions become when technology intersects with death, memory, and identity.

Tyler Durden Fri, 02/20/2026 - 12:00

Meta's AI Would Like To Keep You Posting After You're Dead

Ever since social media became a fixture of daily life, an uncomfortable question has lingered: what should happen to someone’s account after they die? Leave it frozen in time? Hand it to family members as a memorial? Or quietly let it fade into the algorithm?

A few years ago, Meta Platforms explored a far more ambitious possibility, according to Futurism. In 2023, the company received a patent describing how a large language model could be trained on a user’s past posts to simulate their voice and behavior — keeping an account active if the person were “absent,” including in the event of death. The filing, led by CTO Andrew Bosworth, outlined how such a system could generate posts, comments, likes, and even private messages in the user’s style.

The idea was striking, and for many, unsettling. Meta has since said it has no plans to move forward with that example. But the patent offers a snapshot of a moment when tech companies were aggressively testing the limits of what generative AI might do — including extending a person’s digital presence beyond their lifetime.

The Futurism piece says that the concept isn’t entirely theoretical. A small but growing “grief tech” sector has promoted AI tools that recreate voices or personalities of the deceased using photos, recordings, and written messages. Proponents argue that such tools could offer comfort. Critics worry they could complicate the grieving process.

Even within Meta’s own public comments, there has been ambivalence. CEO Mark Zuckerberg has spoken about AI companions as a way to address loneliness and, in a 2023 interview with podcaster Lex Fridman, suggested that interacting with digital representations of loved ones might help some people cope with loss. He also acknowledged the psychological risks and the need for deeper study.

The business logic behind such experiments is difficult to ignore. Platforms like Facebook are filled with dormant accounts — profiles that remain but are rarely updated. More AI-generated activity could mean more engagement and more data. As University of Birmingham law professor Edina Harbinja observed, the commercial incentive is clear, even if the ethical path forward is not.

Others urge caution. University of Virginia sociologist Joseph Davis has argued that part of grieving involves confronting the reality of loss, not blurring it with simulations.

Meta has distanced itself from the patent’s more provocative scenario. Still, its existence underscores how far companies have been willing to push generative AI — and how complex the questions become when technology intersects with death, memory, and identity.

Tyler Durden Fri, 02/20/2026 - 12:00