JPMorgan Chase and Goldman Sachs have cut their AI loan exposure to Volta by approximately $5 billion, underwriting only $1.3 billion of the total.

According to Bloomberg, JPMorgan Chase and Goldman Sachs, while leading the roughly $5 billion loan sale for AI cloud startup Volta Infrastructure Holdings, implemented an unusual risk control arrangement: the two banks underwrote only $1.3 billion in term loans, leaving roughly $3.7 billion in chip-related loans un-underwritten to reduce their own exposure. Sources familiar with the matter said the move aims to guard against risks including investors demanding higher returns for high-risk AI debt, and banks being forced to hold positions when loans fail to sell. The debt is priced at a yield of around 11%, one of the highest levels for AI financing in the leveraged loan market, and the transaction is unrated, which typically makes Collateralized Loan Obligations (CLOs) – the largest buyers of such debt – difficult to participate. Banks usually underwrite entire debt packages to assure borrowers of funding availability, but after suffering losses from unsold loans amid sharp interest rate hikes in 2022, they have grown more cautious about untested AI financing structures. The loan commitment subscription deadline is October 14; JPMorgan had already started gauging investor interest back in August.