SB Energy IPO Filing Discloses $3 Billion Nvidia Investment, $5.5 Billion in OpenAI Warrants and a $105 Billion Nvidia Lease Backstop
SoftBank's power-and-data-center arm filed to list on Nasdaq under "SBE" seeking $5 billion to $7 billion, and told the SEC it is "substantially dependent" on OpenAI, its main tenant and an investor.
The Company That Rents Power to Its Own Landlord
SB Energy wants to sell you shares in a company that made $138.7 million in the first half of 2026 and lost about $3.2 billion in that same stretch[1][11]. That is not a typo. Most of the loss, roughly $2.57 billion, came from a non-cash accounting charge tied to stock warrants it gave OpenAI[1]. The rest of the story explains why a company can look like that and still be one of the year's most closely watched IPOs.
SB Energy is SoftBank's power and data-center arm. On September 1, 2026, it made public a filing to list on the Nasdaq Global Select Market under the ticker "SBE"[1][6]. It's trying to raise $5 billion to $7 billion, which reports say points to a valuation near $50 billion[2][6].
Two facts about this filing sit next to each other and don't fit comfortably. The company says it has 8.8 gigawatts of data-center capacity contracted or under construction, anchored by two customers, SoftBank and OpenAI[6][7]. And it says, in its own words to the Securities and Exchange Commission, that it is "substantially dependent" on OpenAI, the same tenant[1]. None of the data centers were actually running when the filing went out[1][11]. So the pitch and the risk warning are describing the exact same relationship.
Why a Chipmaker Is Bankrolling Its Customer's Landlord
Here's the part that raises eyebrows: Nvidia, the company that makes the chips that go inside these data centers, is putting $3 billion into the company that builds and owns the buildings[1][4]. That money breaks into two pieces. A $1.5 billion private placement of new non-voting stock, priced at whatever the IPO price ends up being, and a separate $1.5 billion prepaid contract signed August 17, 2026, priced at 90% of the IPO price[1][5]. Both pieces were in the original filing together, not added later in some follow-up amendment, despite descriptions that circulated suggesting otherwise[1][5].
Nvidia went further. It agreed to personally guarantee lease payments on the project's first phase, a commitment capped at $105 billion, meaning Nvidia pays if OpenAI can't[3]. And OpenAI, the tenant who would be paying that lease, holds warrants — the right to buy nearly 4 million shares for a penny each — worth about $5.5 billion as of June 30, 2026, up from $3.6 billion when they were issued in January[4][12].
To see why this looks strange, walk the money in a circle. Nvidia funds the landlord. The landlord's building houses OpenAI. OpenAI uses that space to run the chips it buys from Nvidia. Critics call this circular financing: the same small group of companies trading money and promises among themselves, making it hard for an outside investor to tell real demand from deals the group made with itself[9]. Ed Zitron, whose newsletter has been the most pointed critic, argues the entire IPO would not exist without these related-party deals holding it up[9].
Nvidia's chief executive, Jensen Huang, rejects that label directly. His argument is that OpenAI will pay its lease out of a real, growing business, and that OpenAI's expansion plans could translate into roughly $600 billion of Nvidia computing purchases through 2030[8]. Taking non-voting stock, Nvidia notes, means it isn't taking control of the company it's funding — it's making a bet, not building an empire[1][8]. Whether that $600 billion figure becomes real revenue or stays a forecast is exactly the question the skeptics are asking.
The Bottleneck Nobody Can Buy Their Way Around
Underneath the finger-pointing sits a plainer problem: Nvidia can build chips faster than the United States can build the power plants and transmission lines to run them[3][8]. A data center needs a site, a grid connection, and years of construction before it can turn on. That's the actual scarce resource here, and it's what SB Energy is selling.
The company points to real, built things to back that up. It energized 900 megawatts in Milam County, Texas, back in 2024 and is now building a gigawatt-plus campus there[7]. In Ohio, it's planning at least $4.2 billion in new regional grid investment alongside the utility AEP Ohio, which the companies say will keep the cost of that new capacity off existing customers' bills[6].
That's also where SoftBank's own motive comes in. SoftBank owns SB Energy outright right now, meaning it's carrying the entire cost of a mostly-unbuilt, multi-billion-dollar construction project on its own balance sheet[1][2]. A successful IPO turns that private financial burden into publicly traded stock and lets outside investors share the cost of finishing it[1][2]. Giving Nvidia non-voting shares lets SoftBank pull in that outside capital without handing over any actual control[1].
A Tenant Gets Paid to Sign the Lease
There's a piece of this that sounds backwards until you see how commercial real estate actually works: SB Energy needs a tenant with a signed, long-term lease before it can convince lenders and investors this project will make money. Nobody finances an empty building. So OpenAI, the tenant, gets paid — in warrants worth billions — for the risk of committing to rent space in campuses that don't exist yet[4][12].
Seen from OpenAI's side, that's not a handout. It's compensation for taking on a 20-year obligation as a company that is itself not yet profitable, a genuine risk if the AI buildout doesn't pan out as expected[4]. The warrants vest in stages tied to milestones, so OpenAI's advocates note it collects only as it actually performs, not all at once[4]. From the outside, though, the picture is of a landlord paying its own biggest tenant to show up, and the tenant's compensation now shows up on SB Energy's books as a $2.57 billion charge, since the accounting value of those warrants has climbed as the deal has looked more likely to succeed[1].
That is precisely why the $105 billion Nvidia guarantee exists. If OpenAI's warrants and business plan alone were enough to convince investors, SB Energy wouldn't need Nvidia standing behind the lease too. The guarantee only pays out if OpenAI actually defaults, so it hasn't eliminated the underlying risk — it has simply moved where that risk sits, off SB Energy's lenders and onto Nvidia's own balance sheet[3].
Who Pays if the Wiring Runs Through Your Backyard
The other side of this project doesn't touch the stock market at all. It runs through the communities near SB Energy's actual construction sites. New data-center campuses draw enormous amounts of electricity from shared regional grids, and the new power lines and substations built to serve them are often paid off over years by everyone on that grid, not just the data center.
SB Energy's own prospectus concedes the fight over this is real. It names "community opposition, local moratoria and hyper-local dissent, including growing public resistance to AI and AI-related infrastructure" as a listed business risk[6]. That's the company itself acknowledging, in a legal filing, that not everyone near its projects wants them there. Its counter is the $4.2 billion Ohio grid investment with AEP Ohio, which it says is structured to protect existing ratepayers rather than pass costs onto them[6]. Whether that holds up will be decided by state utility regulators, not by how the stock trades.
The Coverage Split Along Predictable Lines
How outlets told this story tracked pretty closely with who their readers are. CNBC led with the "substantially dependent" risk language straight from the filing, putting the cautionary note first even though the framing itself is accurate[1]. Nikkei Asia and the trade publication IFR, writing for financial and banking audiences, described Nvidia's backing as "unprecedented" support that "underpins" the deal, treating SoftBank's financial engineering as an achievement with little mention of ratepayers or local pushback[2][3].
Quartz's headline paired Nvidia's investment with OpenAI's warrants in a single line, using verbs that quietly cast one as active and the other as a handout — Nvidia "invests," OpenAI "gets"[4]. On the retail-investor side, Stocktwits led with Huang's rebuttal and his $600 billion figure without an equally specific number from the other side, and cited only the $1.5 billion placement rather than Nvidia's full $3 billion commitment[8]. Zitron's newsletter, explicitly written as an adversarial critique, laid out the circular-financing mechanics in detail but left out the operating side of the business almost entirely — the 8.8 gigawatts under contract, the 900 megawatts already running in Texas[7][9].
What happens next depends on something no filing can answer in advance: whether OpenAI's revenue grows fast enough to cover 20-year leases on capacity that, for now, mostly doesn't exist. If it does, Nvidia's guarantee never gets called and the whole structure looks like sound planning in hindsight. If it doesn't, the bill for up to $105 billion lands on Nvidia, and the public shareholders who bought in after SoftBank, Nvidia and OpenAI had already taken their positions are the ones left holding the stock[1][3][4].
Summary
SB Energy is the power and data-center arm of Japan's SoftBank. On September 1, 2026, it made public a filing to sell shares to the public on Nasdaq under the ticker "SBE"[1][6]. It is trying to raise $5 billion to $7 billion, which reports say points to a value near $50 billion[2][6]. That would make it one of the year's biggest listings tied to artificial intelligence.
The filing is unusual because of who is standing behind it. Nvidia, the chipmaker, committed $3 billion in two separate deals[1][4]. OpenAI, the maker of ChatGPT, holds warrants — options to buy stock at a token price — valued at about $5.5 billion as of June 30, 2026[4][12]. Nvidia also agreed to a guarantee capped at $105 billion covering lease payments on the first phase, so it pays if OpenAI cannot[3]. SoftBank and OpenAI each invested $500 million earlier in 2026[1][10].
The company told the SEC it is "substantially dependent" on OpenAI as both tenant and shareholder[1]. Its 8.8 gigawatts of contracted or under-construction capacity rests on two anchor customers, SoftBank and OpenAI[6][7]. Revenue in the first half of 2026 was $138.7 million, up 66.4% from $83.3 million a year before — and none of it came from data centers, because none were running when the filing went out[1][11].
That is the real dispute. Critics say the money moves in a circle: Nvidia funds the landlord, the landlord houses OpenAI, OpenAI buys Nvidia chips, so Nvidia's revenue shows up twice[9]. Nvidia's chief executive, Jensen Huang, rejects that label, saying OpenAI will pay its lease and that its buildout could mean roughly $600 billion of Nvidia compute through 2030[8]. One point of order on the record: the two $1.5 billion Nvidia pieces were both in the original filing, not added later by an amendment[1][5].
The Event
SB Energy, majority-owned by SoftBank, filed a registration statement with the U.S. Securities and Exchange Commission for an initial public offering on the Nasdaq Global Select Market and Nasdaq Texas under the ticker "SBE." The filing was dated August 31, 2026 and became public on September 1, 2026[1][6]. It discloses that Nvidia contractually committed to buy $1.5 billion of a new class of non-voting Class N common stock in a private placement closing alongside the IPO, at the IPO price, and separately prepaid $1.5 billion to Energy Global, LP under a forward contract dated August 17, 2026 for shares priced at 90% of the IPO price[1][5]. The filing also discloses about $5.5 billion in warrants held by OpenAI and an Nvidia guarantee of lease payments with a $105 billion remedy cap[3][4].
Undisputed Facts
- SB Energy filed to list on Nasdaq under the ticker "SBE" and is seeking to raise $5 billion to $7 billion[1][6].
- Nvidia's commitment totals $3 billion: a $1.5 billion private placement of non-voting Class N stock at the IPO price, plus a $1.5 billion prepaid forward contract dated August 17, 2026 at 90% of the IPO price[1][5].
- OpenAI holds 3,991,809 warrants at an exercise price of $0.01 per share, valued at about $5.5 billion as of June 30, 2026, up from $3.6 billion when issued in January 2026[4][12].
- Nvidia agreed to guarantee lease payments on the first 4.25 GW-IT phase, with a remedy cap of $105 billion, payable if OpenAI becomes insolvent or fails to pay[3].
- The prospectus states SB Energy is "substantially dependent" on OpenAI as both a tenant and an equity investor[1].
- SB Energy reported $138.7 million in revenue for the first half of 2026, up 66.4% from $83.3 million in the same period of 2025, with no revenue yet from its data-center business[1][11].
- SB Energy reported a net loss of approximately $3.2 billion for the first half of 2026, including a $2.57 billion non-cash expense from the rising fair value of its warrant liability (largely OpenAI's warrants) and $589.5 million in stock-based compensation[1].
- SB Energy lists 8.8 gigawatts of contracted or under-construction data-center capacity, anchored by SoftBank and OpenAI, and none of its data centers were operational as of the filing[6][7][11].
- SoftBank and OpenAI each invested $500 million in SB Energy earlier in 2026 in connection with the Stargate program[1][10].
The Pressure
Strip away the moralizing and blame. What structural realities persist regardless of which narrative wins?
- Power is the bottleneck, not chips
- Nvidia can make chips faster than the U.S. grid can energize sites to run them. Money flowing from a chipmaker into a power developer follows that constraint, whatever the label put on it[3][8].
- SoftBank needs an exit, not just a valuation
- SoftBank owns a capital-hungry asset that is mostly unbuilt. A public listing converts private construction risk into tradeable stock and brings in outside money — while Nvidia's non-voting Class N shares keep control at home[1][2].
- Anchor tenants are bought, not won
- A gigawatt campus cannot be financed without a signed long-term lease. That is why OpenAI received about $5.5 billion in penny warrants and why Nvidia added a $105 billion payment guarantee — both are the price of making the project bankable[3][4][12].
- Contingent promises are still promises
- The backstop only pays if OpenAI defaults. That means the risk has not been eliminated; it has been moved from SB Energy's lenders onto Nvidia's balance sheet[3].
Material realityRight now SB Energy is a power company, not a data-center company. It earned $138.7 million in the first half of 2026, up 66.4% from $83.3 million, and none of that came from data centers because none were running when it filed[1][11]. Over the same period it posted a net loss of about $3.2 billion, driven mainly by a $2.57 billion non-cash charge as the fair value of its warrant liability — largely OpenAI's warrants — climbed, plus $589.5 million in stock-based compensation[1]. That loss is a paper effect of the same OpenAI relationship the company otherwise touts as its strongest asset. The 8.8 gigawatts it advertises is contracted or under construction, resting on two anchor customers, SoftBank and OpenAI[6][7]. Real assets do exist — 900 megawatts energized in Milam County, Texas in 2024, a gigawatt-plus campus being built there, and a large Ohio project with at least $4.2 billion of planned regional grid investment via AEP Ohio[6][7]. Whether the valuation holds depends on one thing that no filing can settle: whether OpenAI's revenue grows fast enough to pay 20-year leases on capacity that mostly does not exist yet. If it does, the guarantee is never called and the structure looks prudent. If it does not, Nvidia pays up to $105 billion, and public shareholders — who bought after SoftBank, Nvidia and OpenAI were already positioned — hold the stock[1][3][4].
Narrative as a weaponThree parties are actively shaping how this reads. SoftBank wants the story to be scarcity: power on a schedule, contracted for 20 years, at a roughly $50 billion valuation. Nvidia wants it to be demand, not engineering — hence Huang's public rejection of "circular financing" and his $600 billion compute figure, which is a forecast, not a booked order. Critics want it to be a closed loop, and their strongest evidence is not rhetoric but SB Energy's own prospectus language about being "substantially dependent" on one tenant, plus the $3.2 billion net loss driven by the very warrant liability tied to that tenant. Note also a framing that circulated ahead of the listing and does not match the record: the two $1.5 billion Nvidia pieces were disclosed together in the original registration statement, not added later by an amendment, so descriptions of a "fresh" commitment stacked on an earlier one overstate the news[1][5].
How Each Side Sees It
Each major actor’s view — how it frames things, its underlying incentive, and how it’s materially affected. Tap a side to read it.
Frames it asSB Energy argues it is selling something genuinely scarce. The bottleneck for AI is not chips alone — it is power delivered on a site, on a schedule. SB Energy already energized 900 megawatts in Milam County, Texas in 2024 and is building a gigawatt-plus campus there[7]. It says it has 8.8 GW of contracted or under-construction capacity, backed by 20-year leases with creditworthy counterparties[6][7]. On the ratepayer question, it says the Ohio buildout comes with at least $4.2 billion of new regional grid investment through a partnership with AEP Ohio, so existing customers are not asked to fund it[6]. And it argues the disclosure is unusually candid: the prospectus itself flags OpenAI concentration, community opposition and local moratoria as risks[1][6].
WhySoftBank wants to convert a private, capital-hungry buildout into public equity at a high valuation — reported near $50 billion — and to bring in outside money without giving up control, which is why Nvidia's stock is non-voting[1][2].
Impact on themA successful listing funds construction that is mostly unbuilt today. A failed or weak one leaves SoftBank carrying the capital cost on its own balance sheet[2][6].
Frames it asNvidia's case is that it is removing a bottleneck in its own market, not manufacturing demand. Jensen Huang rejects the "circular financing" label, saying OpenAI will pay its lease from real business and that OpenAI's infrastructure plans could mean roughly $600 billion of Nvidia compute through 2030[8]. On the guarantee, Nvidia's argument is that it is bearing risk, not hiding it: a backstop capped at $105 billion is a contingent promise that pays only if OpenAI defaults, and disclosing it in a public prospectus puts that exposure in front of investors rather than off in a private side letter[3]. Taking non-voting stock, it notes, means it does not control the company it is funding[1].
WhyGuarantee the physical sites and power that its chips need, and keep its largest customer solvent enough to keep buying[3][8].
Impact on themNvidia is on the hook for up to $105 billion if OpenAI cannot pay, and holds $3 billion of equity exposure whose value tracks the same AI buildout that drives its chip sales[1][3].
Frames it asOpenAI's position is that it is being paid for the risk it takes on. Signing a 20-year lease on a campus that does not exist yet is a large commitment from a company that is itself unprofitable. The warrants — the right to buy shares for a penny each — are the price of being the anchor tenant that makes the whole project financeable[4][12]. Its advocates note the warrants vest in stages tied to milestones, so OpenAI collects only if it actually shows up and performs[4].
WhyLock in gigawatt-scale capacity ahead of rivals, at terms that give it upside in the landlord rather than only a rent bill[4][12].
Impact on themOpenAI's stake is worth more the better the IPO prices — the warrant liability already rose from $3.6 billion at issue in January 2026 to $5.5 billion by June 30, 2026[4][12]. It is expected to hold a low single-digit percentage of the company after the offering[4].
Frames it asThe skeptics' point is not that the deals are fake. It is that they are not independent. SoftBank owns the landlord. SoftBank and OpenAI each put in $500 million. OpenAI got $5.5 billion in warrants to sign a lease, then Nvidia funded the landlord, and OpenAI buys Nvidia chips[9][12]. When the same handful of parties sit on both sides, an outside buyer cannot tell real demand from deals the group made with itself. The concrete evidence they point to is in the filing: none of the data centers are running, no data-center revenue has been booked, and the company itself says it is "substantially dependent" on one tenant[1][11]. The $105 billion backstop, they add, is an admission that the tenant's own credit was not enough[3][9].
WhyAvoid buying a valuation built on commitments that unwind together if AI spending slows[9].
Impact on themRetail and institutional buyers take the concentration risk once the shares trade; SoftBank, Nvidia and OpenAI got their positions before pricing[1][4].
Frames it asLocal residents and ratepayer advocates argue the costs land on people who never signed a lease. Large campuses draw power from shared grids, and new lines and substations get paid for over years by everyone on the system. Their strongest evidence is the company's own prospectus, which names "community opposition, local moratoria and hyper-local dissent, including growing public resistance to AI and AI-related infrastructure" as a business risk[6]. That is the developer conceding the fight is real.
WhyKeep bills and land use under local control rather than set by a data-center developer's schedule[6].
Impact on themSB Energy and SoftBank say at least $4.2 billion of grid investment with AEP Ohio is structured to protect ratepayers; whether that holds depends on state regulators, not on the IPO[6].
Like this article?
The Bias Ledger average rating 4.4
The same story, as framed by outlets across the spectrum, ordered least to most biased. The bias score (1 = straight, 10 = heavily spun) is an AI assessment of that framing — click an outlet to see its track record. The tell is the word choice or omission that reveals the angle.
| Outlet | Vantage | Bias | How they frame it | The tell |
|---|---|---|---|---|
| DatacenterDynamics | UK data-center industry trade press | 2 | "SB Energy files for IPO, targeting a raise of $5-7bn" | Neutral, transaction-first headline. Includes the tenant-concentration point and the AEP Ohio ratepayer claim, but reports the $4.2 billion grid figure close to the companies' own characterization. |
| CNBC | U.S. center | 3 | "Softbank's SB Energy files for IPO, says it's 'substantially dependent' on OpenAI" | Leads with the risk-factor language from the filing rather than the deal size. That is accurate quoting, but choosing the dependence line as the headline puts the bear case first. |
| Nikkei Asia | Japanese business | 4 | "Nvidia underpins expected $50bn IPO valuation for SoftBank's SB Energy" | "Underpins" treats Nvidia's involvement as structural support for the price. The framing centers SoftBank's financial engineering as achievement; U.S. ratepayer and local-opposition angles are absent. |
| IFR | UK capital-markets trade press | 4 | "Nvidia's unprecedented US$105bn backstop tees up SB Energy for IPO" | "Unprecedented" and "tees up" are the tell — the guarantee is presented as a deal-making feat for a banker audience, with the contingent-liability side left mostly implicit. |
| Quartz | U.S. center-left business | 4 | "SB Energy IPO filing: Nvidia invests $3B, OpenAI gets warrants" | Pairs the two related-party items in one headline, inviting the reader to connect them. The verb split — Nvidia "invests," OpenAI "gets" — quietly casts the warrants as a handout. |
| Stocktwits | U.S. retail-investor platform | 6 | "Nvidia Invests $1.5B In SB Energy For OpenAI Data Center, Pushes Back On 'Circular Financing' Concerns" | Gives Huang's rebuttal the headline and his $600 billion compute figure prominence, without an equally specific counter-figure. Also cites only the $1.5 billion piece, understating the $3 billion total. |
| Where's Your Ed At (Opinion) | U.S. tech-critical newsletter, subscriber-funded | 8 | "The Hater's Guide To Circular Financing" — argues the IPO is "only made possible by circular financing" with a valuation resting on deals with a customer that cannot afford them. | Self-labeled as adversarial. The specific mechanics are documented from the filing, but the operating assets — 8.8 GW contracted, 900 MW already energized in Texas — are omitted entirely. |
References
- Softbank's SB Energy files for IPO, says it's 'substantially dependent' on OpenAI — CNBC · U.S. center, business-news network owned by Comcast/NBCUniversal
- Nvidia underpins expected $50bn IPO valuation for SoftBank's SB Energy — Nikkei Asia · Japanese business daily; owns the Financial Times
- Nvidia's unprecedented US$105bn backstop tees up SB Energy for IPO — IFR · UK capital-markets trade publication owned by LSEG; audience is bankers and issuers
- SB Energy IPO filing: Nvidia invests $3B, OpenAI gets warrants — Quartz · U.S. center-left business site
- SoftBank's SB Energy files for IPO, Nvidia to invest USD 1.5bn — Renewables Now · Bulgaria-based renewable-energy trade newswire, subscription-funded
- SB Energy files for IPO, targeting a raise of $5-7bn — DatacenterDynamics · UK data-center industry trade press, advertiser- and event-funded
- SB Energy Data Center Power Portfolio Reaches 8.8 GW in IPO Filing — Microgrid Media · U.S. distributed-energy trade outlet
- Nvidia-OpenAI Deal Isn't 'Circular Financing,' Says Jensen Huang, Sees $600B Compute Opportunity — Benzinga · U.S. retail-investor financial media, bullish-market audience
- The Hater's Guide To Circular Financing (Part Two) — Where's Your Ed At · Subscriber-funded newsletter by Ed Zitron; explicitly adversarial toward the AI industry
- SB Energy secures $1 billion from OpenAI and SoftBank for Stargate datacenter expansion — pv magazine USA · Solar-industry trade publication, advertiser-funded
- SoftBank-backed SB Energy files for U.S. IPO as AI turbocharges infrastructure demand — BNN Bloomberg · Canadian business network, licensed Bloomberg content
- OpenAI's SB Energy Warrants Valued at $5.5B — TechRepublic · U.S. business-technology trade site, advertiser- and lead-gen funded