NVIDIA makes additional investment in SB Energy... Wall Street data center skepticism spreads

(Seoul = Yonhap News) Reporter Seonghan Lee = NVIDIA is aggressively building an artificial intelligence (AI) ecosystem by investing an additional $1.5 billion (approximately 2.08 trillion won) in SB Energy, which is pursuing the construction of the world's largest data center.

However, the New York Times (NYT) reported on the 21st (local time) that as skepticism about the data center industry grows in some quarters on Wall Street, IPOs of related companies are being postponed or suspended one after another.

Nvidia announced today that it has agreed to acquire an additional stake in SB Energy, a data center developer supported by Japan's Softbank Group.

NVIDIA will acquire new N-class shares without voting rights at 90% of the future SB Energy IPO public offering price.

Accordingly, NVIDIA's total investment in SB Energy increases to $3 billion (approximately 4.1 trillion won).

There is analysis that NVIDIA is mobilizing enormous financial power to support the overall AI ecosystem.

The total capacity of SB Energy's data centers under contract or under construction in Texas and Ohio, USA, amounts to 8.8 gigawatts (GW).

In addition to NVIDIA, OpenAI is also investing in SB Energy.

Nvidia CEO Jensen Huang recently announced that Nvidia could spend up to $105 billion (about 145.3 trillion won) by guaranteeing OpenAI's Ohio data center lease debt.

Despite this investment enthusiasm, the NYT reported that skepticism about the data center industry is spreading in some quarters on Wall Street.

The newspaper pointed out, “The backlash against data centers, which have become a topic of debate in the midterm elections and at home dinner tables across the United States, is now leading to Wall Street.”

In the case of SB Energy, it was scheduled to be listed on Nasdaq this month, but the IPO schedule was delayed as investors raised doubts about the company's value of more than $50 billion (about 69 trillion won).

Although SB Energy has not yet operated a single data center, it is expected to have an order backlog of $439 billion (about 608 trillion won), mainly at its Ohio facilities, for about 20 years starting in 2028. This is the background for investors to have doubts about the ransom price.

The NYT cited the cases of nuclear energy company Holtec indefinitely suspending its listing plans citing 'uncertainty in data center development' and power company Aggreko's listing being delayed, and analyzed, "This is a very rare brake on the AI ​​industry, which has received full support from investors for several years."

The newspaper said, “Despite investors’ caution, long-term demand for AI is still enormous,” and added, “Next month’s IPO of data center developer Nscale will be a test bed for investors to evaluate the value of data center companies in a cool market.”