Nvidia invests $1.5B in SB Energy, backstops $105B for OpenAI's Ohio data center

OpenAI said it signed a 20-year lease for the campus, which is being built on a former uranium processing site owned by the U.S. Department of Energy. Slashdot reported the lease as 10 years. SB Energy, which will own and operate the complex once construction is complete, plans to build a 9.2-gigawatt natural gas power plant there, expected to cost $33 billion, and $4.2 billion in transmission lines, according to TechCrunch. The site previously enriched uranium for the U.S. nuclear arsenal and Navy submarines. U.S. officials have said Japan is funding the gas-fired generation under the 2025 trade and investment deal, Slashdot reported.

Nvidia said it will be the exclusive provider of chips for the data center. Its credit support initially covers the first 4.25 gigawatts of capacity and could be extended to the entire campus, the Wall Street Journal reported, citing people familiar with the matter. Nvidia has also reportedly agreed to pay SB Energy up to $105 billion if OpenAI cancels the lease and no replacement tenant is found. OpenAI did not disclose the campus cost, but the Journal reported the site is set to host hundreds of billions of dollars worth of Nvidia chips.

SB Energy's existing investors include SoftBank and OpenAI. SoftBank previously held $5.8 billion of Nvidia stock and sold it in November to help fund other AI investments, according to TechCrunch. Nvidia's $1.5 billion investment backs SB Energy's continued evolution into a leading AI infrastructure developer, according to a joint announcement from Nvidia, OpenAI and SB Energy. SB Energy is reportedly planning an initial public offering as early as next month and seeking a valuation of up to $50 billion, according to SiliconANGLE.

The cost of building natural gas power plants has risen 66% in the last two years, according to BloombergNEF. Once SB Energy's plant and other new gas-fired generation are completed, they will compete for natural gas with export markets, a situation that BloombergNEF said could triple natural gas prices in some parts of the country.

OpenAI said the Ohio campus will use closed-loop, air-cooled cooling systems that do not require water refills. The coolant, typically a mix of water and propylene glycol, is pumped through server racks to absorb heat, then routed outside where fans cool the pipes. This reduces water consumption compared with traditional systems that evaporate water. Construction is scheduled to run through 2032, creating 35,000 construction jobs and 2,500 long-term maintenance roles, with the first 800 megawatts of capacity coming online in 2028.

The financing follows recent Securities and Exchange Commission guidance that eases risk-retention requirements for data center debt, CNBC reported. Last month, the SEC agreed with law firm Latham & Watkins that some data center securitizations are not asset-backed securities under the Exchange Act and are therefore exempt from Dodd-Frank risk-retention rules. The guidance is a staff opinion, not a new rule, but attorneys said it will make data center financing more flexible and capital-efficient. Securitization attorney Orion Mountainspring of Orrick told CNBC that "folks contemplating this transaction will be quite happy about the response from the SEC." B.K. Lee of Alston & Bird said the guidance "gives them the opportunity over time to push down the required equity in the deal." The SEC and ratings agencies declined to comment.

Separately, Nvidia last week entered $500 billion in partially backstopped agreements with private equity firms, including KKR and Apollo, to support what they describe as a new "asset class" for computing power, according to CNBC. The SEC guidance is expected to encourage more such data center financing structures.