‘Google Backstop’ Adds New Twist to Data Center Financing Frenzy

Alphabet Inc.-owned Google’s novel support on a $3.2 billion debt transaction for TeraWulf Inc.’s data center build-out has introduced a new tool to the burgeoning world of financing for artificial intelligence-linked infrastructure, and investors are champing at the bit to get a piece of the deal.

Orders for the junk-bond sale were north of $10 billion, with investors latching onto the so-called “Google backstop” for TeraWulf’s financing, according to people familiar with the matter. The debt has been rated Ba2 and BB by Moody’s Ratings and Fitch Ratings, respectively, at the high end of junk territory.

Google’s support ...