Lenders committed $121 billion in credit for US data center properties in 2025, as demand for data center financing surges, S&P Global analysis has found.

According to S&P, the total value of lending committed to banks rose by around $30bn year-on-year, while the total number of loans decreased by 32, indicating a significant number of high value financing deals in 2025.

These were driven by large-scale data center construction. Small and large banks both participated through various financing vehicles, including credit facilities, asset-backed securities, commercial mortgage-backed securities, and industrial revenue bonds.

Large banks are capitalizing on the needs of hyperscalers, leveraging investment banking arms to manage securitization offerings. S&P said these banks are “benefitting significantly” from the surge in demand.

Loans are being syndicated across multiple banks to spread risk, for example, a recent $6.92bn loan to QTS Realty Trust that was spread across 11 lenders. Last week, QTS announced a similar financing round that was similarly spread across a consortium of banks.

S&P said these deals were ensuring “broad participation” across the banking sector, with smaller banks engaging in syndicated loans and providing funding for smaller projects.

The geographic distribution of such loans has also evolved, S&P said. While the top 10 states for data center loans align largely with top 10 data centers hubs, new projects have cropped up in frontier markets, such as New Mexico. The research firm said this indicated a “shift towards areas with favorable tax advantages, energy availability, and land.”

A recent report from JLL identified a similar trend, forecasting Texas to become the world’s largest data center market by 2030 due to power and land availability, as well as its business-friendly environment.

S&P’s analysis shows Texas is the third-largest recipient of data center loans in 2025, with $16bn in financing. New Mexico, a frontier market highlighted by S&P, came sixth with $4.5bn in 2025 loans.

Arizona topped the list with more than $41bn, followed by Illinois with just under $22bn.

Virginia, currently the largest data center market in the world, came ninth, with just $3bn in loans on data center properties recorded in 2025.

Frontier markets are experiencing significant growth in the AI era, with nearly two-thirds of construction happening in these markets.

Markets like Virginia are suffering from their own success, as large investments from data center companies have put their power infrastructure under strain.

Last week, lawmakers in Virginia, which has historically been a data center-friendly jurisdiction, voted to force Virginia-based data centers to prove their green credentials to continue to qualify for tax breaks in the state.

The legislation also requires that data centers match all grid-sourced fossil fuel electricity with clean energy credits, as well as phase out diesel backup generators in favor of green alternatives.

Virginia is also considering a temporary moratorium on any new data center projects, as state utilities struggle under the weight of contracted capacity.