Nvidia commits $1.5 billion to OpenAI’s SB Energy project

Nvidia announced on Monday a $1.5 billion investment in SB Energy, a data-center developer linked to SoftBank and OpenAI. The deal gives Nvidia the role of exclusive compute-infrastructure supplier at OpenAI’s Ports-Pike data center near Cincinnati, Ohio, a control point that exceeds the value of the initial payment.

In addition to the direct investment, Nvidia is offering the project a credit facility of up to $105 billion to fund construction. The facility is slated to start at 4.25 gigawatts and expand to 8 gigawatts, placing it among the world’s largest industrial electricity consumers. The numbers come from documents the company filed with the SEC and reveal the true scale behind the current AI race.

SB Energy is already owned by SoftBank and OpenAI. SoftBank held Nvidia shares worth $5.8 billion until last November and sold them to finance other AI investments, a move that now appears to fund a competitor. Nvidia is entering as a shareholder and exclusive hardware supplier, a structure that resembles vertical integration more than a standard partnership.

The site belongs to the U.S. Department of Energy and was previously used for uranium enrichment for the nuclear arsenal and Navy submarines. On this land SB Energy will build a natural-gas power plant with a capacity of 9.2 gigawatts, at an estimated cost of $33 billion. BloombergNEF reports that the cost reflects a 66% increase in gas-plant construction expenses over the past two years.

When such plants connect to the grid, they will compete for the same natural gas as export markets, a dynamic that could triple gas prices in parts of the United States. Nvidia is betting that demand for compute will justify the energy cost, but the model rests on the assumption that gas prices will remain affordable over the plant’s lifespan. In the absence of official performance benchmarks for the facility, the venture represents a macro-economic gamble as much as a technological one.