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OpenAI and SoftBank have agreed to invest $1 billion in SB Energy, an infrastructure company partly owned by the Japanese conglomerate, in a new deal aimed at fueling the AI startup’s construction of massive data centers.
The deal announced Friday sees OpenAI and SoftBank each investing $500 million in SB Energy, an energy group that has shifted its focus to developing data centers. The maker of ChatGPT has hired SB Energy to build a data center in Texas as part of its $500 billion Stargate project.
The deal comes a month after SoftBank completed its latest investment in OpenAI and adds to a series of intertwined transactions involving the startup and its suppliers.
SoftBank owns a significant stake in SB Energy and has committed some $41 billion to OpenAI in AI deals orchestrated by Chief Executive Officer Masayoshi Son. SB Energy did not disclose its valuation.
Son’s conglomerate is also a major partner alongside database group Oracle in the Stargate AI infrastructure project, which will provide computing power to chatbot maker ChatGPT.
OpenAI President Greg Brockman said: “The partnership with SB Energy brings together their strength in data center infrastructure and energy development and OpenAI’s deep expertise in data center engineering. »
Fears about the circularity of OpenAI’s investments have sparked nervousness among investors who fear its roughly $1.5 billion infrastructure commitments far outstrip revenues and rely on ambitious growth forecasts.
Chief Executive Sam Altman touted ChatGPT’s roughly 800 million weekly users last year, but only a portion of those users pay for the services.
The company has spent significant sums to expand its data center capacity, having signed a deal with SB Energy in September for a 1.2 gigawatt data center cluster in Milam County, Texas. This agreement is part of the 10 GW of capacity that the group intends to build in the United States on several sites.
SoftBank created SB Energy in 2019 to carry out renewable energy projects. The group has already built solar farms used by Google to power several of its data centers in Texas. In recent years, the company has shifted its focus to building data centers and plans to commission two gigawatt-sized facilities this year.
SB Energy received about $800 million from Los Angeles-based Ares Management last year, marking the private equity firm’s third investment in the group.
SoftBank has been making deals around data centers and acquired DigitalBridge, a U.S. investor in data centers and telecommunications infrastructure, for about $4 billion last month.
