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In this week’s issue:
First, Google paid to keep a nuclear plant alive. The company committed at least €13 billion to Finland across 2027–2028 and signed a 22-year contract for up to half of Fortum’s Loviisa output. About 80% of the €700 million life-extension programme lacked an investment decision, raising a key question: what happens when a tech company becomes the credit behind a national power asset?
Then, more than ten US states pulled back. Ohio’s data center sales-tax exemption cost over $1.5 billion in 2025, more than ten times what lawmakers projected, and new applications are frozen. New Jersey enacted a repeal in August.
Finally, the lenders changed. Vantage is seeking $2 billion from PIMCO and PGIM, and Blue Owl is planning a public REIT seeded with roughly $6.5 billion of its own assets.
Let us get into it.
Why the Tax Break Is Now a Credit Question
Part of a data center’s return sits on a contract and part sits on a policy, and this week the two came apart.
A sales-tax exemption is not a construction subsidy.
Servers are a large share of project cost and get replaced every three to five years, so the exemption is a recurring operating line inside the hold-period model.
The counterparty on that line is a legislature.
More than ten US states have now paused or cancelled those exemptions. Ohio’s reached over $1.5 billion in 2025, and Governor Mike DeWine froze new applications.
New Jersey enacted a repeal in August. A tenant covenant survives an election. A tax exemption does not.
Google showed the other route in the same week. It committed €13 billion to Finland and signed a 22-year contract for up to half of Loviisa’s nuclear output, which is what let Fortum sanction a life-extension programme that was about 80% unapproved.
Google did not ask Finland for a concession. It bought a position in Finland’s power system.
So split your model. Take the part of the return that sits on a signed contract with a named counterparty, then take the part that sits on a policy, and underwrite the second at zero.
If the deal still clears, you own an asset. If it does not, you own a lobbying position.
Where the capital went when the terms stopped holding is below.
THIS WEEK BY REGION
The week’s biggest moves — what happened and what it signals.
North America
The terms that shaped the last U.S. data center cycle are being rewritten. States are pulling back tax breaks, with more than ten states pausing or cancelling exemptions, while Texas Republicans are turning against the sector ahead of November. Lenders are adjusting with them.
The financing rotated in the same week. Vantage is seeking $2 billion from PIMCO and PGIM, a move the paper attributes to political and community opposition facing bank lenders.
Blue Owl is planning a listed data center REIT seeded with roughly $6.5 billion of its own assets. Microsoft reportedly plans about 38GW of capacity by 2032, a figure I could not confirm elsewhere.
If you run an infrastructure fund, the incentive line in your model now has a political counterparty, and private credit is pricing that before the banks do.
Europe
Europe sold power certainty this week and got capital for it. Google committed at least €13 billion across 2027 and 2028 to Hamina, Kajaani, Muhos and Vaala, its largest single investment in Europe, alongside a 22-year contract for up to half of Fortum’s Loviisa output.
Bloomberg reports the contract unlocks about €1 billion of investment needed to keep the plant running.
The package also carries 629MW of new onshore wind contracts and a 94MW battery near Kajaani due online in late 2027. Equinix and CPP closed their acquisition of atNorth .
If you invest in real estate, the Nordic bid is no longer about cheap power. It is about power a counterparty will commit to for two decades.
Asia-Pacific
Capacity across the region is being contracted by parties that are not hyperscalers. TCS plans to invest up to $7.4 billion in a one-gigawatt campus in southern India.
Firmus agreed to supply OpenAI with compute capacity in Malaysia, in a market where officials say data center power draw is climbing as temperatures rise.
Nvidia is expanding data centre capacity in Australia to meet AI demand.
For tech and venture investors, the offtaker here is increasingly a services firm or a model developer, not a cloud platform, and the credit behind the lease differs accordingly.
PUBLISHED THIS WEEK
Saudi Arabia’s LEAP 2026: $15 Billion, Two Hyperscaler Regions, One Sovereign Operator — Two hyperscalers land six weeks apart in a market where one state-backed operator already holds the live GPU clusters.
Redata Runs Five Years. Three Of Its Four Waivers Run Four Months. — Brazil passed a five-year data center regime in which three of the four federal waivers expire on December 31.
How Long Does an AI Chip Last (And Why Two of the Biggest Companies Disagree) — Meta and Amazon assigned opposite useful lives to the same AI hardware in the same month, a depreciation gap worth billions a year.
PPAs, Leases, and Pre-Commitments: How Demand Gets Locked Before Concrete — How powered shell, turnkey, and take-or-pay structures each lock demand before construction, and where the counterparty credit sits in each one.
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Where the Capital Went When the Terms Stopped Holding
Fortum had roughly €700 millions of Loviisa life-extension work on the books and had not sanctioned about 80% of it.
A 22-year revenue covenant from one customer is what makes that capital expenditure financeable.
Deliveries start in 2028 at reduced volume and scale to about half the plant’s output across 2030 to 2049, which is the window the modernisation has to serve.
The plant supplies more than 10% of Finland’s electricity and was facing closure in 2030.
The exposure runs both directions, and neither party disclosed the pricing. Fortum’s investment case now rests on one counterparty’s 22-year covenant.
Google’s Finnish power rests on two 1970s-era reactors completing an uprate programme, with a 38MWe increase already under way and due in 2028.
The US ran the opposite experiment. Ohio built a hub on an exemption that cost more than ten times its original estimate, and legislators there have been reported as wanting to reopen agreements already signed with Amazon, Meta and Google.
Nothing signed has been clawed back, but risk pricing has already shifted. That is why Vantage turned to PIMCO and PGIM over bank syndicates, while Blue Owl is seeking public shareholders to fund its next growth phase.
When I run the split across the three, the answers differ.
Google converted a political dependency into a 22-year contract, so the policy share of its Finnish return is close to zero.
Vantage moved its funding to lenders who price political risk instead of avoiding it, which costs more and clears faster.
Blue Owl is the one I cannot answer from disclosure, because the seeded portfolio has not been itemised and I do not know how much of its value sits on incentives a state can reopen.
That is a finding, not a gap. The document to watch is Blue Owl’s registration statement when it files, and specifically whether the seeded assets disclose incentive agreements by state and expiry.
NOTABLE TRANSACTIONS
Key structures and capital moves from this week’s deal tape.
Google and Fortum: 22-year power purchase agreement covering up to 50% of the Loviisa nuclear plant
The 22-year contract scales to half of Loviisa’s output from 2030–2049, supporting a €700 million life-extension programme. A single corporate offtaker now underpins revenue for an asset supplying over 10% of the country’s electricity.
If you underwrite power, the mechanism is a compute contract standing in for a regulated revenue base, and it is the first time that has happened in Europe.
Vantage Data Centers: seeking $2 billion from PIMCO and PGIM
Vantage is seeking $2 billion from institutional lenders after $7.4 billion in recent financing, backed by 17 campuses and over 4GW of leased IT load. The FT cites growing political and community opposition to data center lending.
For operators, the mechanism is a spread you pay to a lender who will price local opposition rather than decline it, and that spread is the new cost of building where permission is contested.
Blue Owl: publicly traded data center REIT seeded with roughly $6.5 billion
Blue Owl plans to seed a listed REIT with $6.5 billion in data center assets, then raise capital for acquisitions. Unlike Blackstone’s $2 billion blind pool, it launches with an operating portfolio, signaling demand for public-market liquidity.
If you allocate to public markets, the mechanism is seeded-asset pricing, and your diligence question is what share of that portfolio’s cash flow depends on incentives a state can reopen.
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Have a great week.
— Obinna
Great piece. I think it supports my thesis “companies with AI upside without AI dependence”.