Beyond the Artificial Intelligence (AI) Trade

The AI build-out is creating a significant fixed-income opportunity through securitized credit backed by operating data centers, contracted cash flows, and diversified pools of hard assets.

• Data-center ABS and CMBS allow investors to lend against completed, powered, operating, and leased infrastructure rather than take equity exposure to AI companies or construction-stage development risk.
• Data centers have been financed in ABS since 2018 and in single-asset, single-borrower CMBS since 2021; roughly $50 billion was outstanding across these markets as of June 2026.
• Traditional cloud and co-location facilities generally have fixed rents and escalators, while specialized AI-training sites more often use full-lifecycle cost-recovery leases that create greater look-through exposure to the tenant.
• The broader securitized market is worth roughly $13 trillion and spans mortgages, consumer loans, commercial assets, telecom networks, and CLOs; ABS is typically smaller and more diversified, whereas CMBS can involve larger single-property and single-tenant exposures.
• Investors should assess collateral adaptability, tenant and lease quality, structural protection, leverage, liquidity, and relative value rather than rely only on ratings; securitized credit has historically offered roughly 100–150 basis points of spread pickup versus investment-grade corporates.

Takeaway: Securitized credit can provide income, downside protection, and diversification within fixed income, but the dispersion of collateral, structures, borrowers, and liquidity makes dedicated research and active relative-value management essential.