Nvidia is reportedly considering a $3 billion investment in SB Energy, a subsidiary of SoftBank Group, as part of a larger financial arrangement tied to OpenAI’s planned Ohio data center project, according to information shared with Channel NewsAsia. The investment is linked to broader discussions involving Nvidia and OpenAI regarding a $100 billion credit support package for the Ohio campus, which is being developed by SB Energy. The deal, if finalized, would mark a significant step in the expansion of AI infrastructure, with SB Energy also preparing to go public shortly, potentially raising at least $5 billion in its initial public offering. The proposed investment from Nvidia is structured so that half of the $3 billion would be committed upon signing the Ohio project deal, with the remaining portion allocated during SB Energy’s IPO. These details were outlined in the report, which cited unnamed individuals familiar with the negotiations. However, neither Nvidia nor SB Energy has yet responded to inquiries for comment, leaving the specifics of the deal uncertain. Meanwhile, the Wall Street Journal reported earlier that Nvidia had scaled back its initial funding commitment for the Ohio project, reducing its guaranteed support from $250 billion to less than $120 billion. This adjustment followed investor concerns about the risks associated with such large financial commitments. Nvidia’s revised stance comes amid a broader effort to secure third-party capital for AI infrastructure. On August 10, the company announced a partnership with six major financial institutions, including Goldman Sachs, to establish compute financing platforms aimed at raising over $500 billion in capital for AI-related projects. This initiative reflects growing demand for AI computing resources, driven by the need for extensive data center networks to support machine learning and other advanced technologies. The collaboration underscores the increasing involvement of institutional investors in funding AI infrastructure, as governments, corporations, and startups compete to expand their computational capabilities. Goldman Sachs, in particular, has played a pivotal role in facilitating this financing plan. The bank is currently engaged in discussions with potential investors interested in participating in Nvidia’s $500 billion initiative. U.S. insurers, money managers, and banks are expected to form the core group of investors, with asset managers retaining a substantial portion of the financing. Goldman’s involvement includes providing junior capital and private credit financing through its asset management division, as well as assisting in placing debt into private credit funds and eventually public debt markets. This role builds on Goldman’s longstanding relationship with Nvidia, which dates back to multiple high-profile transactions, including advising on Nvidia’s $6.9 billion acquisition of Mellanox Technologies in 2019 and serving as a lead underwriter for its $25 billion bond sale in June. The significance of this financing model lies in its departure from traditional vendor-financed arrangements. Earlier AI infrastructure deals often relied on guarantees from vendors such as Broadcom, which provided residual-value assurances for large portions of debt. In contrast, the Nvidia-led initiative aims to create an asset-backed market for AI compute, enabling debt instruments to function more like conventional securities. This shift could reduce funding costs and attract a wider array of investors, thereby lowering barriers to entry for new participants in the field. According to Bank of America analyst Vivek Arya, this represents a strategic pivot away from vendor-centric financing models. SB Energy, which is developing the Ohio data center for OpenAI, continues to advance its plans for an upcoming IPO. The company, founded in 2019, specializes in large-scale power and data center infrastructure, supporting the surge in AI-driven workloads. Its Ohio project, if completed, would become the largest data center announced to date, with OpenAI still negotiating a binding lease for the entire 10-gigawatt facility. Despite these developments, OpenAI faces ongoing scrutiny due to its lack of profitability, even though it maintains a valuation of $852 billion. The company’s ability to fund large-scale commitments remains under review, highlighting the challenges faced by AI-focused enterprises in securing consistent financial backing.
★
Keep the news honest.
ObjectiveNews is reader-funded and ad-free — we show you the bias instead of hiding it. Support independent journalism for €4/month.
Become a Supporter
SG
