SB Energy confirmed that Nvidia secured a highly competitive bid for an Ohio AI data center campus, while BofA analysts suggest the associated financing risks may be exaggerated.
Nvidia has won a “very competitive” bidding process for a massive new Ohio data center project slated to be leased by OpenAI, according to SB Energy Co-CEO Rich Hossfeld. He noted that the chipmaker’s involvement will help support financing and “ensure the success” of the development.
“It was a very competitive process,” Hossfeld said in an interview with CNBC. “I think that’s emblematic of the demand we’re seeing for compute. It’s not just OpenAI. It’s not just Anthropic.” He added that competing interest in the project came from leading hyperscalers, cloud providers, and frontier AI companies. Hossfeld emphasized that Nvidia’s participation could help SB Energy secure favorable financing for the infrastructure portion of the deal. “Nvidia helps us to unlock things like investment-grade financing. It helps us to ensure the project is a success,” he said.
Despite the positive project developments, Nvidia’s stock fell more than 2% during midday trading on Tuesday, marking a third consecutive session in the red amid broader market weakness. On Stocktwits, retail sentiment around the artificial intelligence bellwether remained in ‘bearish’ territory over the past day.
Hossfeld also addressed concerns regarding the rapid depreciation of AI chips, particularly as Nvidia accelerates its rollout of new GPU architectures. “Well, our view doesn’t really matter because we’re not financing, and we don’t own the chips. We’re not taking risk on the chips. That’s something that Nvidia, OpenAI, and others will do,” he told CNBC. Instead, SB Energy is concentrating on the physical campus and infrastructure, which it expects to remain operational for decades. “It’s a 20-year lease. If you look at a data center, the data center life can be 20, 30, 40 years. That’s how we look at our infrastructure. We’re kind of the bedrock that underpins it,” Hossfeld explained.
The Ohio facility is part of a broader industry push to build out the infrastructure required to support rapidly growing demand for artificial intelligence computing. Backed by SoftBank, OpenAI, and now Nvidia, SB Energy is responsible for developing the site, including securing land, arranging power, and constructing the physical data center infrastructure.
In a research note cited by TheFly, Bank of America analyst Vivek Arya stated that Nvidia’s current valuation presents a “compelling” opportunity. Arya noted that the shares are trading at a 34% to 50% free cash flow discount, even after accounting for risks tied to the company’s expanding vendor financing activities. While acknowledging that Nvidia’s “off-balance-sheet risk matters but resists easy valuation,” Arya suggested the stock’s current price may be overstating those concerns.
Bank of America reiterated its ‘Buy’ rating and $350 price target on Nvidia. The firm also anticipates the company will provide further disclosure on its off-balance-sheet commitments when it reports earnings on August 26. According to Koyfin estimates, Wall Street expects Nvidia to report adjusted earnings per share of $2.08 on revenue of $91.96 billion.