--- title: "HSBC CEO Says AI Won't Lift Every Data Center" canonical: "https://thestockmemo.com/article/hsbc-ceo-says-ai-won-t-lift-every-data-center" markdown: "https://thestockmemo.com/article/hsbc-ceo-says-ai-won-t-lift-every-data-center.md" type: article published: "2026-10-21T08:43:49.919089+00:00" updated: "2026-10-21T08:43:49.919089+00:00" image: "https://thestockmemo.com/media/537fd77c-c996-41d4-ba92-45e140f80f0c.png" tags: - "Banks" - "Europe" - "Inflation" --- # HSBC CEO Says AI Won't Lift Every Data Center > Georges Elhedery urged a selective approach to data-center investing, pointing to tenancy agreements and contract pricing as key factors. HSBC CEO Georges Elhedery said not every data center will be a good investment and urged a selective approach based on tenancy agreements and contract pricing. HSBC itself has financed data center deals, including AirTrunk's A$16 billion refinancing. ## What happened HSBC CEO Georges Elhedery warned that not every data center will be a good investment, even as AI spreads. He urged a selective approach to data-center investing. "One has to be selective," Elhedery said. "You have to look at the quality of the tenancy agreements. You have to look at the pricing of these contracts." He added: "Not all of them are of that level of virtuosity that you can support strongly. Some of them may be more challenging." A tenancy agreement is the lease that sets who rents a facility and on what terms. Elhedery sounded more upbeat about AI's use inside HSBC itself. Speaking to CNBC's Dan Murphy on Tuesday, he called artificial intelligence "a major enabler to re-engineer and reimagine all our businesses, all our activities." That comment seems to address how HSBC runs its own operations, not which data centers deserve funding. HSBC's own ambitions reach into the sector. Its 2025 annual report said the bank intends to become "the leading bank for fast-growing transition ecosystems." The report said HSBC's customer base includes data centers and AI companies. HSBC has also done financing work in the sector. Data center operator AirTrunk closed an A$16 billion refinancing in 2025, excluding Japan, according to the company. The deal used green and sustainability-linked loans across four transactions. HSBC served as joint mandated lead arranger and underwriter across those transactions. Together, the comments and the deal record suggest HSBC wants to stay in data-center finance while choosing deals carefully. ## Why it matters S&P Global ranked HSBC as the seventh-largest bank in the world and the largest lender in Europe last year. HSBC had total assets of close to $3 trillion in fiscal 2025. That scale could give Elhedery's call for selectivity real weight in data center finance. McKinsey identified access to financing and energy as constraints on the pace of data center development. Government bond yields across major economies hit multi-decade highs in 2026 amid concerns about elevated government deficits and mounting debt, as well as fears of sticky inflation and more hawkish central banks. We think these conditions reinforce Elhedery's case for judging each data center project on its own terms. Private credit's share of AI investment financing climbed from 9% in 2024 to 34% in 2025, according to OECD estimates cited by the Bank of England. CoreWeave has assumed more than $51 billion in debt to fund its infrastructure build-out. A significant risk transfer lets a bank shift part of the credit risk on a pool of loans to outside buyers. In September 2026, HSBC held discussions on a significant risk transfer tied to more than $1 billion of loans financing data centers and other AI infrastructure, according to Bloomberg reporting. ## By the numbers Hyperscalers raised $200 billion in bond financing in 2025, according to Mohamed El-Erian. He described these borrowers as "yield insensitive" and "spread insensitive" because "they are betting on something that is truly transformational." The other large figures here are projections, each from a different source. - El-Erian said hyperscalers are "probably going to raise a trillion in bond financing" in 2026. - McKinsey estimates that cumulative global data center spending could reach $7 trillion by 2030. - JPMorgan Chase estimated earlier in 2026 that $4.1 trillion in AI-related debt will be issued by the end of the decade. HSBC's own capital figures measure the strength of the whole bank. - HSBC reported $127.7 billion of CET1 capital as of June 30, 2026. - HSBC reported $906.4 billion of risk-weighted assets as of June 30, 2026. - HSBC reported a 14.1% CET1 ratio as of June 30, 2026. --- ## Legal notices The content on The Stock Memo is general information only. It is not investment advice, a research report prepared for you, or an offer or solicitation to buy or sell any security. Frontier Media Inc. is not a registered investment adviser or broker-dealer. Investing in securities can result in a total loss of the money you put in. Past prices and past results are not a reliable guide to the future. Statements about what may happen later can turn out differently. Prices shown here may be delayed and are not a basis for a trade. Frontier Media Inc., its staff, or people connected with them may hold positions in securities discussed on the site. 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