Nvidia’s $3B Bet On SB Energy Anchors SoftBank Data-Center IPO Push – OpenAI Holds 3.9M Warrants

• Nvidia will purchase $1.5 billion of non-voting Class N shares in a private placement at the IPO price.
• The investment comes on top of a separate $1.5 billion prepaid forward contract Nvidia entered into with SB Energy on August 17.
• Nvidia has provided residual-value guarantees covering about 4.25 gigawatts of initial PORTS-Pike capacity, with an aggregate guaranteed value of $105 billion.

Nvidia (NVDA) is committing $3 billion to SB Energy, while OpenAI holds nearly 4 million warrants in the data center developer, according to the data center developer’s IPO filing, 

SB Energy filed for a U.S. IPO on Tuesday, seeking to list on the Nasdaq under the ticker “SBE.” The company has yet to set the offering size or IPO price. OpenAI’s warrants give it the right to buy SB Energy shares for a nominal $0.01 each, with 1.73 million set to vest and be exercised when the IPO is completed.

NVDA stock fell over 1% in early morning trade amid broader market weakness. On Stocktwits, retail sentiment around the AI bellwether remained in ‘extremely bullish’ territory over the past day, accompanied by chatter at ‘extremely high’ levels. 

Nvidia’s Bigger Bet On AI Infrastructure

Nvidia has agreed to purchase $1.5 billion of SB Energy’s newly authorized Class N non-voting common stock in a private placement that is expected to close alongside the IPO. The price per share will match SB Energy’s IPO price.

This adds to Nvidia’s previous $1.5 billion to SB Energy under a forward contract for Class N shares on August 17. The filing says the two transactions represent a total investment of $3 billion by Nvidia.

In its filing, SB Energy said SoftBank and OpenAI are strategic investors and customers at its campuses, including the Milam County site and the PORTS-Pike Technology Campus in Ohio. 

Nvidia is a strategic investor and residual-value guarantor for the PORTS-Pike project, which is intended to host OpenAI’s AI computing capacity. Nvidia has provided residual-value guarantees covering approximately 4.25 gigawatts of initial capacity at PORTS-Pike, with an aggregate guaranteed value of $105 billion. 

Nvidia Expands Its AI Ecosystem

Nvidia’s investment in SB Energy is another example of Nvidia extending its reach across the AI supply chain. Rather than simply supplying GPUs, Nvidia is putting capital behind companies building the data centers and computing capacity required to use those chips.

On Monday, the firm announced a $3.5 billion investment in MediaTek through convertible bonds and collaboration on building custom AI chips. Last week, Nvidia acquired open-source platform Hugging Face for $12.9 billion.

NVDA stock has gained over 16% this year and around 30% in the last 12 months.

Read also: Tom Lee Sees 'Very Strong' September Market Rally If Fed Holds Rates – Says Bitcoin’s ‘First Leg Up’ Has Begun

For updates and corrections, email newsroom[at]stocktwits[dot]com.