OpenAI and SoftBank have invested $10 billion in their partner SB Energy. The infrastructure company is collaborating with the two tech giants to build data centers on a massive scale in the United States to support the development of artificial intelligence.
In a statement released on Friday, OpenAI and SoftBank announced that each company will invest $5 billion to support SB Energy as a data center developer and operator.
OpenAI concurrently announced that it has selected SB Energy to construct and operate its 1.2-gigawatt data center in Milam County, Texas. One gigawatt of power is sufficient to supply approximately 750,000 U.S. households simultaneously.
This investment represents the latest instance of major technology companies vying for energy supplies. Securing electricity has become a critical factor for tech firms to realize their AI ambitions and is driving a significant surge in power demand.
The collaboration strengthens the commercial ties between OpenAI and SoftBank. SoftBank is one of the largest investors in OpenAI, and the two parties have previously collaborated on the $500 billion Stargate project.
SB Energy's Business Expansion
SB Energy, long supported by SoftBank, was initially established as a renewable energy and energy storage developer. In recent years, it has expanded its operations to include the development, ownership, and operation of data centers.
Prior to this funding round, the company secured an $800 million investment last year from the Ares Infrastructure Opportunities fund.
The statement indicated that the valuation corresponding to this investment was not disclosed. SB Energy is currently developing several gigawatt-scale data center campuses.
The partnership with SB Energy builds upon the foundation of OpenAI's Stargate initiative.
This joint project, advanced by OpenAI in collaboration with partners like SoftBank and Oracle, aims to invest $500 billion over four years in U.S. data center and AI infrastructure construction.
The first site for this project is a large-scale data center in Abilene, Texas, developed by Oracle, with Crusoe serving as the development partner.
Industry Connections Draw Attention
The increasingly tight transactional relationship between SoftBank and OpenAI reflects the expanding network of collaborations among technology companies.
These interconnected deals are underpinning the growth of the AI industry, but they also raise external concerns about the potential for a chain reaction if AI demand fails to meet expectations.
For large technology companies, securing power supply is a core element for meeting the demands of AI development. This has spawned an energy race to support more and larger data centers, fueling continuous growth in electricity demand.
The power demand is prompting some companies to invest in suppliers or power plants, or to arrange their own energy sources. Meta announced on Friday that it had reached agreements potentially giving it access to over 6 gigawatts of nuclear power supply.
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