Zankore, an AI data center operator, is seeking $6 billion in financing to fund expansion of its compute capacity infrastructure.

Singapore's United Overseas Bank Ltd. (UOB) is leading negotiations to arrange a US$6 billion loan for Zankore, an Indonesia-based AI platform, according to Zankore Chairman Vikram Sinha as reported by Bloomberg. UOB previously co-underwrote a US$3.1 billion loan for the company alongside four other banks in September.

Zankore intends to use the new financing to increase its AI data center capacity tenfold to 1 gigawatt (GW). In September, the company secured the US$3.1 billion loan to develop an AI Factory in Indonesia, initially planned for 100 megawatts with potential expansion to 1 GW.

Global investment banks have emerged as key players in GPU-linked financing for AI infrastructure companies. Citigroup, JPMorgan Chase, Barclays Plc, Deutsche Bank AG, Banco Santander SA, and Sumitomo Mitsui Banking Corp. are currently evaluating GPU-linked loans, according to Bloomberg sources. Beyond Zankore, these banks have recently facilitated similar facilities for GMI Cloud and PaleBlueDot AI. Sources indicate that at least six bankers and advisers are discussing or aware of additional GPU-linked deals across Asia.

Investment banks have become primary participants in these transactions due to their expertise in complex financial structures. However, significant concerns persist around such lending. Bankers cite rapid chip depreciation, technology obsolescence, and volatile rental rates as material risks. Additional concerns include chip valuation uncertainty, geopolitical risks, and AI-related risks.

A particular risk identified by market participants is circular financing, where Nvidia Corp., the chip supplier, might purchase unsold computing capacity if customer contracts with its partners such as GMI Cloud and Zankore fall through.