OpenAI, SoftBank invest $1 billion in Stargate partner SB Energy

Core Insights - OpenAI and SoftBank are each investing $500 million in SB Energy to enhance its capabilities as a data center developer and operator [1][5] - OpenAI has chosen SB Energy to construct and manage a 1.2 gigawatt data center in Milam County, Texas, which can power approximately 750,000 US homes [1][5] - The investment does not disclose a valuation for SB Energy [1][5] Industry Context - The demand for energy is increasing as large tech firms pursue ambitious AI projects, leading to a competitive landscape for securing power to support data centers [2][5] - Companies like Meta Platforms Inc. are also investing in energy sources, with agreements potentially totaling over 6 gigawatts of nuclear power [2][5] Company Background - SB Energy, supported by SoftBank, was initially focused on renewable energy and storage but has recently expanded into data center development and operations [3][5] - The new funding follows SB Energy's previous $800 million investment from Ares Infrastructure Opportunities funds [3][5] Strategic Partnerships - The collaboration between SoftBank and OpenAI is part of a broader network of deals among tech companies that bolster the AI sector, raising concerns about potential risks if AI demand does not meet expectations [4][5] - This partnership is linked to OpenAI's Stargate initiative, which aims to invest $500 billion in data centers and infrastructure for AI in the US over four years [4][5] - The first site of the Stargate initiative is a large data center in Abilene, Texas, developed by Oracle in collaboration with Crusoe [4][5]