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This Is What It Takes to Get a Data Center Financed | Odd Lots

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December 11, 2025

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Data centers are weird things. They're partly real estate assets. They're partly extremely advanced technological products. And they have to find a way to consume a tremendous amount of electricity from the grid -- or they increasingly have their own power plants on site. And beyond that, they've become extremely controversial, with more and more communities pushing back on their development. So how do you get all your ducks in a row when a new project is proposed? Who provides the financing at which stage of the agreement? What are the legal complications that arise? On this episode we speak with Travis Wofford, a partner at the law firm Baker Botts, who works in the firm's AI practice. We discuss all the intricacies of these projects, the challenges that arise, and how things have changed in this space just since the beginning of the year.

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Introduction [0:00]

Scale and Financing Requirements [1:41]

Guest Introduction [3:54]

Current Market Activity and Historical Context [5:18]

Securitization Structures and Differences [7:28]

Off-Balance Sheet Financing Rationale [8:51]

Risk Assessment in Data Center Finance [10:24]

Deal Structuring and Credit Protection [12:19]

GPU Lifecycle and Technology Risk [13:52]

Location Strategy and Market Saturation [17:07]

Power and Interconnection Challenges [18:27]

Project Financing Phases [20:51]

Water Infrastructure and Regulatory Considerations[23:48]

Political Environment and Public-Private Partnerships[24:48]

Government Loan Guarantees and Credit Enhancement [27:21]

Private Credit Advantages and Structures [28:55]

Tenant Diversification and Credit Quality [30:34]

Future Financial Instruments and Innovation [31:39]

Operational Risk and Insurance [32:59]

Powered Land Value and Real Estate Strategy [37:39]

Build-Own-Operate versus Grid Connection [38:52]

Market Dynamics and Crowding Out Effects [40:59]

Future Bottlenecks and Market Outlook [43:40]

Conclusion and Wrap-up [44:54]

Bloomberg's Joe Weisenthal and Tracy Alloway analyze the weird patterns, the complex issues and the newest market crazes. Join the conversation every Monday and Thursday for interviews with the most interesting minds in finance, economics and markets.

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Guests & Subjects Covered

Travis WoffordBaker BottsBloomberg Podcasts CheckOdd Lots GetOdd LotsFinancing RequirementsGuest IntroductionCurrent Market Activity

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This Is What It Takes to Get a Data Center Financed | Odd Lots · Bloomberg Podcasts · Sentinel