NVIDIA invests $1.5 billion in SoftBank-linked data center developer

What $1.5 billion bought: exclusive supply rights

NVIDIA announced on the 17th (local time) that it will invest $1.5 billion in SB Energy, a data center developer linked to SoftBank and OpenAI. What stands out isn't the size of the investment itself, but what comes with it. According to NVIDIA's announcement, the investment secures NVIDIA's position as the sole supplier of computing infrastructure for OpenAI's "Ports-Pike" data center being built near Cincinnati, Ohio. On top of that, NVIDIA agreed to provide up to $105 billion in credit to help fund construction of the facility.

The Ports-Pike data center is a continuation of the story METAL LAB reported in early August: NVIDIA guarantees Ohio site for 20 years, supplies OpenAI 4.25GW. At the time, NVIDIA had committed to supplying 4.25 gigawatts of computing infrastructure to the site over 20 years, and this SB Energy investment can be seen as the step that locks in the funding and equity structure to make good on that commitment. According to SEC filings, the facility could expand from an initial 4.25 gigawatts to as much as 8 gigawatts.

What is SB Energy

SB Energy is a data center and power developer whose existing investors include SoftBank and OpenAI. SoftBank had previously held $5.8 billion worth of NVIDIA stock but sold its entire stake last November to raise capital for other AI investments. In effect, the cash raised from selling NVIDIA shares is now flowing back into a data center developer in which NVIDIA itself holds equity.

For OpenAI, this is another instance of its pattern of leasing computing resources from outside partners such as Microsoft, Amazon, Google, and NVIDIA. OpenAI builds the models itself, but the data centers and chip supply chains that run those models are increasingly being filled in through equity and credit arrangements with partner companies, as in this case.

A gas plant on a former uranium enrichment site

The land where the facility is being built is owned by the U.S. Department of Energy (DOE) and was formerly a site used to enrich uranium for U.S. nuclear weapons and naval submarines. SB Energy plans to build a 9.2-gigawatt natural gas power plant on the site to supply power to the data center, at an estimated construction cost of $33 billion.

Part of why that figure has grown so large is the surge in natural gas plant construction costs themselves. According to BloombergNEF, the cost of building natural gas plants has jumped 66% over the past two years. On top of that, by the time SB Energy's plant and several others are completed, they will be competing with export markets for natural gas — a combination that some forecasts suggest could push natural gas prices up as much as threefold in certain regions.

Editor's view

This deal can be summed up in one line: NVIDIA is now funding the power supply chain of its own customer. NVIDIA's old identity — the company that sold "picks and shovels" without entering the chatbot race itself — has now advanced to the stage of building the mine where those picks and shovels will be used. The gap between the $1.5 billion investment and the $105 billion credit line alone shows that the real purpose of this deal isn't equity returns, but securing exclusive supply rights. No matter where OpenAI sources its computing power, the structure now ensures that NVIDIA's chips — and NVIDIA's money — are behind it.

The contrast with just a few years ago is striking. Not long ago, AI infrastructure investment followed a simple picture: OpenAI renting Microsoft's cloud. Now the picture has shifted to chipmakers directly investing in data center developers, and even co-building natural gas plants to fill power shortfalls. The competition among AI models has quietly spread into a competition over power plants, transmission grids, and land.

The lesson for domestic companies is clear. Focusing only on the race to secure GPUs means falling behind. Power, land, and regulation are already emerging as bottlenecks even in the U.S., and the fact that a former uranium enrichment site has had to be repurposed shows just how scarce land itself has become — signaling that the next constraint on data center expansion will be the power grid. Teams preparing AI infrastructure domestically need to set up a power procurement plan alongside their GPU procurement plan.

More announcements with a similar structure are likely to follow in the coming weeks. This isn't the first time NVIDIA has taken direct equity stakes in data center developers, and as long as the power bottleneck remains unresolved, these deals — chip companies investing directly in power infrastructure — are only likely to increase.