posted in Technology
Banks are now trying to offload the AI data center debt they just underwrote
startupfortune.com/banks-are-now-trying-to-offload-the-ai-data-center-debt-they-just-underwrote/
Replying to @HaraldvonBlauzahn@feddit.org
I work in commercial real estate. This is a normal common practice in commercial real estate. They honestly do this for pretty much every type of real estate and for as many as they can.
They securitize it in portfolios and sell off interest in those payments to others. They intentionally mix and match properties in portfolios so if one fails, there is less risk to the whole thing.
I’ve seen fast food restaurants, malls, airports, billboards, cell towers, hollywood studios, aerospace firms, law firms, hotels, apartments, everything. And yes, also data centers
Replying to @W3dd1e@lemmy.zip
They intentionally mix and match properties in portfolios so if one fails, there is less risk to the whole thing.
If AI fails, that is 25% of the US GDP, isn’t it? How can you distribute risk for that?
Replying to @HaraldvonBlauzahn@feddit.org
Replying to @HaraldvonBlauzahn@feddit.org
I can’t advise on other assets. I can only speak to commercial real estate securitizations, which is what the article is referring to.
In commercial real estate, they mix lots of different types of properties up into portfolios and they try to balance it out so if an office building fails, it won’t bankrupt investors.
These types of portfolios are safe because they invoke less risk overall. It’s the same reason why your 401k portfolio has a bunch of different companies and not just Apple or Tesla stock.
It won’t gain value as fast as a single stock, but it is less likely to lose value overall and is a safer risk.