Nvidia wants to invest three billion dollars in SB Energy. SB Energy is owned by SoftBank. SoftBank is the company that lost four billion dollars on WeWork because they thought renting desks was a technology revolution.
The money goes toward an Ohio data center. OpenAI needs the data center. OpenAI needs it because teaching computers to write mediocre poetry requires more electricity than the entire state of Rhode Island uses in a year.
Nvidia makes the chips that go in the data center. Nvidia is now also paying for the building that houses the chips. This is like Ford buying you a garage so you'll promise to park their cars in it.
The structure works like this: Nvidia provides credit support to SoftBank's energy subsidiary so SoftBank can build a facility that will buy Nvidia's products to run OpenAI's software that will eventually replace the jobs of people who can't afford Nvidia's stock. Vertical integration for the modern age.
Retail traders will read this headline and think it's bullish for Nvidia. They'll ignore that Nvidia is spending three billion dollars to become a commercial real estate lender in Ohio. They'll ignore that SoftBank's track record in energy projects is about as strong as their track record in office-sharing startups. They'll buy calls anyway.
The deal is still being negotiated. The terms could change. The whole thing could fall apart. But that won't stop seventeen different Substacks from explaining why this proves we're in an AI supercycle that will last until 2055.
OpenAI gets a data center. SoftBank gets three billion dollars. Nvidia gets to pay for the privilege of selling someone their own products. Everyone wins except the people dumb enough to think any of this matters for next quarter's earnings.
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