Nvidia 'All-in' on Data Centers…Wall Street's Skepticism 'Stirs'

Nvidia 'All-in' on Data Centers…Wall Street's Skepticism 'Stirs'

Nvidia invests 4.1 trillion won in SB Energy to support AI ecosystem

NYT "IPOs repeatedly delayed"…Wall Street puts brakes on AI optimism

Nvidia is aggressively moving to build an artificial intelligence (AI) ecosystem, including an additional investment of $1.5 billion (approximately 2.08 trillion won) in SB Energy, which is pursuing the construction of the world's largest data centers.

However, the New York Times (NYT) reported on the 21st (local time) that skepticism about the data center industry is emerging in some parts of Wall Street, causing related companies' initial public offerings (IPOs) to be repeatedly postponed or halted.

Nvidia announced today that it has agreed to acquire additional shares in SB Energy, a data center developer backed by Japan's SoftBank Group.

Nvidia will acquire new non-voting N-class shares at 90% of the future SB Energy IPO offering price.

As a result, Nvidia's total investment in SB Energy will increase to $3 billion (approximately 4.1 trillion won).

Analysis suggests that Nvidia is mobilizing vast financial resources to support the entire AI ecosystem.

SB Energy's data center capacity, either contracted or under construction in states like Texas and Ohio, totals 8.8 gigawatts (GW).

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

Jensen Huang, Nvidia's CEO, recently stated that Nvidia could spend up to $105 billion (approximately 145.3 trillion won) by guaranteeing OpenAI's lease obligations for its Ohio data center.

Despite this investment fervor, skepticism about the data center industry is spreading in parts of Wall Street, the NYT reported.

The newspaper pointed out, "The backlash against data centers, which has become a topic of debate in midterm elections and at family dinner tables across the U.S., is now extending to Wall Street."

In the case of SB Energy, it was scheduled to be listed on Nasdaq this month, but investors raised doubts about its valuation of over $50 billion (approximately 69 trillion won), causing the IPO schedule to be delayed.

SB Energy has not yet commenced operations at a single data center, but it forecasts a backlog of $439 billion (approximately 608 trillion won) over approximately 20 years, primarily from its Ohio facilities, starting in 2028. This is the background for investors' doubts about its valuation.

The NYT analyzed that "the AI industry, which had received full support from investors for several years, has very rarely seen a brake applied," citing examples such as nuclear energy company Holtec indefinitely suspending its listing plans due to "uncertainty in data center development" and the delayed listing of power company Aggreko.

The newspaper reported, "Despite investor caution, long-term demand for AI remains enormous," adding, "Next month's IPO of data center developer Enscale will be a test for data center companies to be valued by investors in a cooling market."