Nvidia will invest $1.5 billion in SB Energy, which will build and operate a major Ohio data center for OpenAI.
The investment would further bind Nvidia to OpenAI, with the chipmaker already providing more than $100 billion in credit support for the AI lab on the Ohio data center. It would also be another deal in which Nvidia invests in a company that is expected to buy more of its chips in the near future to outfit the facility.
SB Energy, which is majority owned by Stargate partner SoftBank, is responsible for building the Ohio data center and sourcing the power generation needed to keep it online. It is reportedly looking to secure up to 10 gigawatts of power, mostly from natural gas, to run the facility.
The data center is expected to provide up to eight gigawatts of compute capacity when fully operational, with the total cost of the project estimated at roughly $500 billion at today’s prices. This would make it the largest data center to which OpenAI has exclusive access, with SB Energy set to lease the facility to OpenAI for 20 years.
The Ohio campus will add to OpenAI’s other infrastructure projects with Oracle, SoftBank, and Nvidia, although much of that planned capacity has yet to come online. OpenAI has previously withdrawn from some planned data center projects as it reassesses parts of its infrastructure expansion.
How Nvidia benefits from the AI buildout
Nvidia has been one of OpenAI’s most prominent backers, investing $30 billion in the startup while supplying many of its most powerful GPUs. The company’s surging data center revenue and profit, which helped push net profit to $120 billion last year, has given it the financial firepower to sign major deals with developers and raise huge amounts of debt for further investments.
Even with increased competition, the chipmaker remains by far the most popular supplier of GPUs for data centers, with a market share of more than 85 percent for AI chips. Efforts by hyperscalers and AI labs to build custom chips, often AI accelerators, still frequently see those chips deployed alongside Nvidia GPUs in server racks rather than replacing them entirely. We saw this most recently with SpaceX’s decision to go “all-in” on Nvidia hardware and build its infrastructure around the company’s chips.
No slowdown even with an IPO on the horizon
Even though OpenAI has terminated some Stargate projects in Europe, it has accelerated its expansion in the United States, adding hundreds of billions of dollars in new commitments. It now has $1.4 trillion committed to infrastructure tied to about 30 gigawatts of total compute capacity.
While some of that spending may eventually be scaled back or restructured, it remains an enormous commitment for a company with a $40 billion revenue run rate and little prospect of becoming profitable over the next few years.
Add to that its plans to go public within the next 12 months, and the situation becomes even trickier for OpenAI to manage. As things stand, rival Anthropic is more likely to go public first, which could give OpenAI a better idea of how public markets will value an AI lab with enormous infrastructure costs.
OpenAI and Anthropic remain the two leading AI labs in terms of sophistication and usage, but that may not be enough to convince investors, particularly as interest in Chinese AI models continues to grow. Both labs have reduced the cost of using their models in response to open-weight alternatives gaining favor among cost-conscious companies in the US and Europe.
For Nvidia, the continued buildout of infrastructure creates another opportunity to sell hardware, making its growing financial ties to the AI market increasingly central to its future.
Read more: Nvidia’s $25 billion bond sale shows how the chipmaker is expanding its financing capacity as it invests more heavily in AI companies and infrastructure.