Vinson & Elkins Partner Eamon Nolan shared insights with Bloomberg Law on how AI cloud providers, known as “neoclouds,” are increasingly relying on financial backstops from major technology companies and chipmakers to secure data center capacity and financing.
Nolan explained that the companies providing these backstops are looking for ways to preserve flexibility and limit balance-sheet exposure. Rather than committing to cover all future lease payments, they are shifting toward residual value guarantees, which promise that a data center will retain a certain value if the tenant leaves. “Even the nature of that backstop is a moving feast,” he said.
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Eamon Nolan is a Partner in Vinson & Elkins’ Project Development and Finance practice. He advises private equity sponsors, banks, and developers on financing transactions involving the acquisition, development, and divestment of energy and infrastructure assets in the U.S. and Latin America.
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