2 weeks ago
Nvidia to Lease Land and Power for AI Factories
Nvidia makes special computer chips that help artificial intelligence, or AI, think and learn.
Many AI companies use Nvidia's chips.
But Nvidia's boss, Jensen Huang, says chips alone are not enough.
AI companies also need big buildings, lots of land, and huge amounts of electricity.
So Nvidia decided to help provide those things too.
Nvidia is working with a company called SB Energy to build a giant AI factory in Portsmouth, Ohio.
The company OpenAI will rent the building for 20 years.
The factory will use a very large amount of power, starting at 4.25 gigawatts.
The first part of the factory should be ready between 2028 and 2030.
Nvidia is also giving SB Energy 1.5 billion dollars to help make this happen.
Nvidia CEO Jensen Huang says AI growth is constrained by computing capacity, not algorithms or customer demand.
Nvidia is partnering with SB Energy at the PORTS-Pike Technology Campus in Portsmouth, Ohio, with OpenAI as tenant under a 20-year lease.
The AI factory will have an initial capacity of 4.25 gigawatts, with potential to reach 8 gigawatts, and will use Nvidia's DSX platform.
Nvidia will invest $1.5 billion in SB Energy and subsidise portions of the lease and energy costs.
Each generation of systems at the site could represent about 1.5 million Nvidia GPUs and an estimated $150-200 billion in Nvidia revenue per generation.
- Who
- Nvidia CEO Jensen Huang, partnering with SB Energy, with OpenAI as the tenant
- What
- Nvidia is securing land, power, and physical infrastructure for AI factories, starting with a site at PORTS-Pike
- Where
- PORTS-Pike Technology Campus, Portsmouth, Ohio
- When
- Announced in a post on X; first phase expected online between 2028 and 2030
- Why
- AI labs' growth is constrained by the availability of computing capacity and infrastructure, not algorithms or customer demand
Critics
Nvidia
Key constraint on AI growth
Critics
Some may view algorithms and customer demand as the main drivers of AI growth.
Nvidia
Huang argues growth is constrained by the availability of compute and physical infrastructure, not algorithms or customer demand.
Circular financing
Critics
Nvidia's $1.5 billion investment and subsidies could be seen as circular financing that supports demand for its own chips.
Nvidia
Huang says the arrangement is not circular financing because OpenAI will pay the lease, and Nvidia is using its scale to secure critical infrastructure.
Key facts
- Company
- Nvidia
- CEO
- Jensen Huang
- Partner
- SB Energy
- Tenant
- OpenAI
- Location
- PORTS-Pike Technology Campus, Portsmouth, Ohio
- Initial capacity
- 4.25 gigawatts (potential 8 gigawatts)
- Lease term
- 20 years
- Nvidia investment in SB Energy
- $1.5 billion
Quotes
Jensen Huang
CEO of Nvidia, chief technology officer
“"AI factories require a comprehensive set of critical resources: advanced chips, packaging technologies, memory, and networking, as well as land, power, and the basic physical infrastructure,"”
thehansindia.com
“"Their growth is increasingly constrained not by algorithms or customer demand, but by the availability of computing capacity,"”
livemint.com
thehansindia.com
Sources
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