Nvidia Invests $1.5B in SB Energy Ahead of US IPO
Chipmaker's total backing reaches $3B as data center developer prepares for listing.
1Nvidia's strategic investment
Nvidia is purchasing an additional $1.5B in SB Energy shares at 90% of the upcoming IPO price, bringing its total investment to $3B. The chipmaker is acquiring non-voting shares, focusing on economic benefits rather than control. This move comes as Nvidia's liquid-cooled Rubin chips enable higher rack density, increasing from 250kW to 600kW. The investment aligns with Nvidia's August acquisitions of three land and power companies.
2SB Energy's US capacity
SB Energy currently has 8.8 gigawatts of data center capacity either contracted or under construction in Texas and Ohio. The company is targeting $5B to $7B in proceeds from its upcoming US listing. OpenAI, which is planning its own IPO, is also an investor in SB Energy. This development highlights the growing demand for AI infrastructure in key US markets.
3OpenAI's warrant deal
SB Energy granted OpenAI warrants worth $5.5B to secure a 20-year lease on a 10 gigawatt campus in southern Ohio, scheduled for operation in 2028. These warrants, issued at $3.6B in January, had appreciated by $1.9B by June. This innovative financing structure demonstrates how tech companies are securing critical infrastructure through non-traditional means.
4European expansion plans
SoftBank has committed up to €75B for 5 gigawatts of AI data centers in France, with initial sites in Dunkirk, Bosquel, and Bouchain. The first phase aims for 3.1 gigawatts by 2031, structured separately from the US-listed entity. Schneider Electric serves as strategic partner at Dunkirk, where the grid is approximately 70% nuclear-powered.
5Unique financing approach
SB Energy's financing model stands out in Europe, where no other power developer is using similar warrant-based structures. Nvidia isn't investing in discounted pre-IPO shares for European projects, and no continental campus has tenants paying rent through warrants. This highlights the distinct approaches to infrastructure financing across regions.
6Market challenges in UK
OpenAI paused its Stargate UK project in April, citing UK industrial electricity prices over four times US levels and copyright law uncertainties. The project, announced with Nvidia and Nscale for northeast England, remains on hold until regulatory and energy cost conditions improve. This decision reflects the challenges of European AI infrastructure development.
7Strategic partnerships
Nvidia's investment in SB Energy creates a symbiotic relationship, as its processors generate demand for SB Energy's data centers. The deal follows Nvidia's pattern of strategic investments in power infrastructure to support its AI hardware ecosystem. This vertical integration approach helps secure the energy capacity needed for next-generation computing.
8Industry implications
These developments signal a new phase in AI infrastructure financing, where tech giants directly invest in power providers. The warrant-based model for securing capacity may become more common as demand outstrips supply. Nvidia's moves demonstrate how chipmakers are expanding their influence across the AI value chain, from hardware to energy infrastructure.
Original article: The Next Web — Nvidia Invests $1.5B in SB Energy Ahead of US IPO