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OpenAI, SoftBank back US data center firm SB Energy with $1b
OpenAI and SoftBank have invested US$1 billion in SB Energy to support large-scale data center projects in the US.
SB Energy, a data center developer and operator with roots in renewable energy, will receive US$500 million each from OpenAI and SoftBank.
OpenAI has chosen SB Energy to build and operate a 1.2-gigawatt data center in Milam County, Texas.
SB Energy is working on several multi-gigawatt data center campuses across the US.
🔗 Source: Bloomberg
🧠 Food for thought
Implications, context, and why it matters.
Interconnection and permitting clarity will determine if OpenAI’s 1.2 GW Milam County site delivers on time
- OpenAI picked SB Energy to build and run a 1.2 GW data center in Milam County 1. The announcement did not confirm ERCOT (Electric Reliability Council of Texas, the state grid operator) interconnection approval. It also did not state Large Flexible Load (LFL, a Texas designation for very large power users such as data centers) status or local land-use and construction permits. These items shape feasibility, timing, and cost.
- SB Energy says initial facilities are under construction with first service in 2026 2. Delivery hinges on ERCOT queue position and in-service dates. The firm built the 900 MWdc (megawatts direct current, a rating commonly used for solar plants) Orion Solar Belt in Milam County with Google as anchor customer 3. A multi-gigawatt data center needs round-the-clock electricity and follows different rules.
Transformer shortages present expansion opportunities for suppliers targeting multi-gigawatt AI campuses
- US faces a 30% transformer shortfall in 2025 4. Lead times reach 128 weeks for power transformers and 144 weeks for generator step-up units (transformers that raise generator voltage to transmission levels) 5.
- Suppliers and investors can go after $1.8 billion in North American manufacturing expansions 54. Target federal or state backed capacity growth and Original Equipment Manufacturer (OEM) partnerships for 2026 to 2030 AI campuses. Imports cover about 80% of US supply in 2025 4, creating openings for switchgear and heavy transport near campus hubs.
