U.S. senators call out opaque financing used by AI companies

Senator Elizabeth Warren and three Democratic colleagues are urging Treasury Secretary Scott Bessent to investigate the financing arrangements being used by technology companies to fund artificial intelligence data centers.

In a letter dated January 22, Warren, alongside Senators Richard Blumenthal, Chris Van Hollen, and Tina Smith, called on the Financial Stability Oversight Council to launch a formal investigation into what they described as increasingly complex and opaque debt packages supporting AI infrastructure. 

The senators requested a response by February 13.

Senators call out opaque financing used by AI companies

The senators specifically called out financing structures that allow companies to keep massive debt obligations off their balance sheets through special-purpose vehicles (SPVs), where external investors fund and own data centers that are then leased back to the technology companies.

The letter seen by Bloomberg was sent to Bessent, pointing out Meta’s $27 billion Hyperion data center project in Louisiana as an example of the trend. 

The deal, which was announced in October 2025, saw Meta partner with Blue Owl Capital in a joint venture, with Blue Owl owning 80% and Meta the rest. Morgan Stanley served as the external financial advisor and bookrunner for the deal, which includes debt issued to PIMCO and other bond investors.

Meta will lease the completed facility from the SPV, and deals like this allow recording of rental obligations on financial statements rather than the total agreement. 

Elon Musk’s xAI is also reported to have similar deals.

While the debt is usually rated investment-grade because of parent company backing, critics say the SPV model obscures the true scale of financial exposure across the system. This is because the deals are backed by rent payments tied to chips or equipment instead of traditional corporate assets, creating novel dependencies that regulators have yet to fully evaluate.

Why is Senator Warren calling for this investigation?

Warren’s letter stated that such off-balance-sheet structures “conceal the company’s true financial condition, allowing it to appear healthier and less leveraged than it actually is and enabling it to borrow more than they otherwise could.”

The senators warned that AI companies unable to increase revenues and service their massive debt loads could cause “destabilizing losses for an interconnected set of financial institutions, triggering a broader financial crisis that harms the economy.”

The letter also notes the risk that this kind of deal poses to retail investors and retirement savers, noting that equity markets have become reliant on a handful of large AI companies. Should the AI industry falter, it could “crush retirement savers and retail investors exposed to the AI industry,” according to the letter.

The letter arrives as Democrats find themselves in the Senate minority. Warren, the top Democrat on the Senate Banking Committee, has emerged as a persistent critic of the Trump administration’s financial regulation approach.

Bessent, confirmed as Treasury Secretary in January, has previously advocated for looser FSOC regulations, pushing to reorient the council toward economic growth rather than stringent oversight. 

The FSOC, established after the 2008 financial crisis, has acknowledged AI as an emerging concern in recent reports but has not examined these specific financing structures.

Meta stated in November 2025 that it plans to invest over $600 billion in infrastructure and jobs in the US in three years, with a major focus on AI data centers. 

Goldman Sachs projects that AI companies may spend more than $500 billion in 2026 alone, while Moody’s Ratings expects that in the coming five years, $3 trillion will be spent on data center-related investments.

It will not be surprising that some of those investments will use the same model. With Senator Warren calling for such deals to be investigated, the next line of action will be how Bessent responds and acts on the letter. 

For now, that is yet to be seen; however, investors and companies seeking to raise funds will be monitoring the development.

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