American Prospect: Private-Equity-Owned Life Insurers Are Funding AI Data Centers, and 44 States Would Reimburse Them 100% If It Blows Up
David Dayen's August 3 piece traces AI data-center lending through the $3 trillion private credit arm of private equity into the $1.5 trillion of life-insurance assets PE firms like KKR and Apollo control — insurers that held 49.5% of assets in privately-placed instruments in 2024 versus 14% for non-affiliated peers. The bailout mechanism is state guaranty funds: when a life insurer goes insolvent, surviving insurers are assessed to cover policyholders, and in 44 states they can take a tax credit and be repaid 100 percent, pushing losses to taxpayers. Researchers cited estimate that private-credit default rates above 15% could trigger insolvency, and 530+ local jurisdictions have already passed data-center restrictions or bans that delay construction and stress those loans.
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