Barclays is seeking to buy default protection from insurers on over $10 billion of debt linked to artificial intelligence infrastructure, according to sources cited by Insurance Journal. The bank aims to create space for more lending as demand from hyperscale clients increases. Talks with insurers are ongoing, with no final decisions yet on the size or timing of any deals. Barclays declined to comment.
Banks often use credit risk insurance to share potential losses and release regulatory capital for new business. The surge in AI-driven data centre projects has led to greater insurer exposure, but a recent Willis Towers Watson survey suggests many insurers are nearing their sector limits for this type of risk. Some are already full on data centre exposure.
With McKinsey projecting global data centre spending to reach $6.7 trillion by 2030, the need for debt financing is expected to grow. This is already putting pressure on the credit market, as seen in recent moves in Meta Platforms’ credit risk and comments from Citadel’s Pablo Salame about market strain.
Barclays is reportedly seeking to transfer more than half of the credit risk on certain AI-related facilities. Senior leaders should monitor insurer appetite and capacity as the sector’s funding needs expand.
