Nvidia invests up to $3 billion in power firm Lancium

Nvidia is moving down the AI stack to the power grid, committing up to $3 billion for a stake in Lancium, the developer behind OpenAI's Stargate data center campus in Texas.

Nvidia will invest up to $3 billion in Lancium, the Blackstone-backed power infrastructure developer behind the Stargate AI campus in Abilene, Texas, locking in scarce electricity capacity for its chip customers' data centers. The Information reported the deal Friday, citing people familiar with the matter.

The initial $2 billion buys Nvidia roughly 20 percent of Lancium, with an additional $1 billion contingent on the developer hitting milestones including grid hookups, the report said. The transaction values Lancium and its portfolio of land and power connections at about $10 billion enterprise value, including debt. The investment is strictly equity — it does not include credit guarantees for data center construction and leases, according to the report.

Lancium has locked 4 gigawatts of power contracts across Texas, including 1.2 GW supplying the OpenAI-Oracle campus in Abilene — the first operational site of the Stargate initiative, a joint venture among SoftBank, OpenAI and Oracle announced in January with up to $500 billion in planned investment. Another 900 megawatts serves a Crusoe-built data center for Microsoft in Abilene, while QTS Data Centers signed 1 GW in Turkey, Texas, and Crusoe has 1 GW under construction in Childress.

The investment extends Nvidia's push from chip seller to AI infrastructure financier. In the quarter ending April, Nvidia poured $18.6 billion into private companies and infrastructure funds — more than in the prior full year — including $2 billion checks to cloud providers CoreWeave and Nebius, plus stakes in optical networking firms Lumentum and Coherent and chipmaker Marvell. Power has become the binding constraint on AI data center growth, and Lancium's 15 GW of pending interconnection capacity gives Nvidia a hedge against the bottleneck.

Power Becomes the New GPU Shortage

Texas Governor Greg Abbott this week ordered a pause on new data center grid interconnection applications, injecting uncertainty into Lancium's expansion timeline. The developer's pending 15 GW sits in a relatively favorable position — partner utility American Electric Power has completed line studies needed to supply its campuses, giving Lancium a head start in the approval queue, people familiar with the matter said.

Nvidia is also weighing credit guarantees for other large-scale projects, including a 10 GW Ohio data center development involving OpenAI and SoftBank, according to the report. That would extend Nvidia's financial backing beyond equity stakes into direct support for construction financing.

Lancium's IPO Path

The capital injection supports Lancium's plans for a potential initial public offering in 2027, according to two people familiar with the matter. A listing would follow data center developers Switch and CyrusOne in tapping public markets as AI infrastructure demand drives a wave of capital raises.

Nvidia shares rose 2.27 percent on the news. The investment deepens Nvidia's exposure to the power layer of AI infrastructure, a segment that has become as critical to data center buildout as GPU supply itself — and one where the chipmaker now holds a direct stake in the scarce resource its customers need most.

This article is for informational purposes only and does not constitute investment advice.