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When Blackstone turned to the private placement market to provide $1.65bn refinancing for data center assets owned by its portfolio company QTS, it was yet another sign that there was a new player in the digital infrastructure market: private credit.

It’s been a big summer for the infrastructure sector and private credit. SMBC’s structuring of QTS’ private placement comes on the back of a $29bn data center financing for Meta in a deal led by PIMCO and Blue Owl, and a possible $12bn backing of Elon Musk’s xAI, which 9fin reported could be led by Apollo.

Here at 9fin, we’ve been chronicling AI’s disruption of levFin, and data centers — the physical manifestation of that disruption — are up next.

Focus on the sector is warranted: last year hyperscalers, the massive single-tenant structures, alone represented a $30bn origination opportunity that is expected to double in 2025.

“I do think there are going to be massive capital deployment opportunities,” David Penna, Davis Polk’s co-head of infrastructure finance, said to 9fin.

But private credit funds are also being tapped out of necessity. Data center financing demand has outgrown what project finance alone can provide. Both the initial construction and refinancing will offer opportunities across the risk profile from investment grade bonds to private credit loans.