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 building an artificial intelligence (AI) ecosystem, including an additional investment of 1.5 billion dollars (about 2.08 trillion won) in SB Energy, which is pursuing the construction of the world's largest data center.

However, as skepticism about the data center industry has emerged in some parts of Wall Street, initial public offerings (IPOs) of related companies are being repeatedly postponed or suspended, the New York Times (NYT) reported on the 21st (local time).

Nvidia announced on the same day that it had agreed to acquire additional shares 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 offer price.

Accordingly, Nvidia's total investment in SB Energy will increase to 3 billion dollars (about 4.1 trillion won).

Analysts say that Nvidia is mobilizing enormous financial power to support the entire AI ecosystem.

SB Energy's data center capacity, with contracts completed or under construction in Texas and Ohio, among other states in the US, totals 8.8 gigawatts (GW).

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

Jensen Huang, CEO of Nvidia, recently stated that Nvidia could spend up to 105 billion dollars (about 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 some 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 dinner tables across the US, 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 more than 50 billion dollars (about 69 trillion won), delaying the IPO schedule.

SB Energy has not yet operated a single data center, but it expects to achieve an order backlog of 439 billion dollars (about 608 trillion won) over approximately 20 years from 2028, mainly from its Ohio facilities. 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 rarely seen the brakes applied," citing cases such as nuclear energy company Holtec indefinitely suspending its listing plans due to "uncertainty in data center development" and the delay in the listing of power company Aggreko.

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