SEC Memo Carves Out AI Data Center ABS From Post-Crisis Safeguards

Bloomberg reported that the U.S. Securities and Exchange Commission recently circulated an internal memo that would exempt asset-backed securities (ABS) tied to AI data centers from key investor-protection rules adopted after the 2008 financial crisis. The carve-out includes the "risk retention" requirement that typically forces issuers to keep a portion of the debt on their books. In the memo, the SEC said data centers do not qualify as financial assets that decline in value over time, arguing that securities linked to them should not face the same constraints applied to ABS backed by auto loans or mortgages. While the guidance does not formally change the law, it carries meaningful practical weight, as issuers had largely followed the post-crisis framework out of caution and compliance. The market has expanded rapidly: annual issuance of data center ABS climbed from $2.4 billion in 2020 to $15.5 billion in 2025, more than a sixfold increase in five years, and is expected to set a fresh record in 2026.