WhiteFiber Pays Up to Refinance, as Uncertainty over Inflation Looms

WhiteFiber, which designs, builds, and operates Tier-3 data centers, is undertaking a refinancing that opts for a higher interest rate but provides more cash on hand, an extra year to repay, and greater flexibility to acquire property and build capacity.

The New York-based company disclosed the new $310 million convertible bond sale in an SEC filing this week, on the heels of reaching a milestone with its 96-acre, 40 MW data center in Madison, N.C. 

The company used $118.5 million of its proceeds to retire earlier debt, and said it would use the rest to buy equipment “including GPU servers to support WhiteFibers cloud business,) and for potential acquisitions, partnerships and joint ventures related…and for working capital and general corporate purposes.” 

Last week, the Federal Reserve made public the minutes of its July meeting of the Federal Open Market Committee, which indicated it was closely watching “a surge in the demand related to the AI buildout.” 

The Fed’s governors said the buildout around data centers and all of its infrastructure is driving up costs for equipment like chips and steel and is causing downstream inflation in the U.S. That itself could lead The Fed to raise interest rates.

So by pulling the trigger now on a 5-percent, convertible financing arrangement, WhiteFiber may be betting that the rates will further increase and the cost of cash to build its operations would only get more expensive. 

In a conference call with financial analysts earlier this month, CEO Samir Tabar suggested another big deal for the company was imminent.

“The initial 40-megawatt deployment is only the first stage at NC1,” Tabar said, according to a transcript. We expect Duke Energy to provide a delivery schedule for the next 45 megawatts of gross capacity in the near term. At that point, Nscale will receive priority notification of the available capacity in accordance with our existing agreement. We also received extremely strong inbound interest for this new upcoming tranche. We’ll evaluate the path forward based on what we believe will deliver the best outcome for WhiteFiber.”

WhiteFiber had reason to lock in capital. The company is growing fast and losing money as it spends. Second-quarter 2026 revenue rose 54 percent year over year to $28.8 million, but the net loss widened to $15.0 million, bringing first-half losses to $27.0 million against $7.4 million a year earlier. Adjusted EBITDA was positive at $5.5 million — evidence the operating business generates cash before depreciation and interest — but the GAAP losses reflect the capital intensity of building data centers. 

WhiteFiber held $56.1 million in cash at the end of the quarter, a thin cushion against ambitions that now include a five-year, $160 million-plus compute deal near Paris, a $45 million letter of intent for its North Carolina site, called NC1, and a partnership with Krambu to bring 100 megawatts of GPU capacity to market by 2027.

WhiteFiber launched its IPO about a year ago, and its shares are trading at $21.22—down more than 50 percent from hits high of $46.87 earlier this year.