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BTIG initiated coverage with a Buy rating and $1,210 price target, citing AI-driven demand and record hyperscaler capex.
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Nvidia, Google and Emerald AI Launch AI Energy Management Alliance
Nvidia, Google and Emerald AI have launched the AI Energy Management Alliance, or AEMA, a coalition that dynamically manages the electricity use of data centers in response to grid conditions. Emerald AI founder and CEO Varun Sivaram said the alliance's founding members are joined by a cohort of 20 launch partners, including the AI lab Anthropic, the semiconductor firm Analog Devices, and the energy companies AES, NRG, Constellation, RWE and National Grid. Sivaram said Emerald AI, which was founded under two years ago, is building with Nvidia and Digital Realty the world's first from-the-ground-up power-flexible AI data center, a 100 megawatt facility in Manassas, Virginia, that comes online later this year. He said Google, one of the founding members, has already done a gigawatt of demand response for its data centers, while Emerald and Nvidia have completed six demonstrations around the world, in London, Phoenix and Virginia. Sivaram said the alliance is talking to the FERC commissioners, state regulators and the administration about a grand bargain in which flexible AI data centers act as good citizens to grids and communities in return for faster and larger connections to the power grid.
▲3impact 4
CleanSpark Data Center Bond Draws $10 Billion in Orders for $2.28 Billion Sale
CleanSpark Inc.'s debut junk-bond offering for a data center tied to Meta Platforms Inc. drew orders of about $10 billion, more than four times the deal's size, according to people familiar with the matter. The five-year notes were set at almost $2.28 billion and launched at 98.5 cents on the dollar to yield 8.25%, roughly 1.75 percentage points above the average for BB rated firms tracked by Bloomberg. The fundraising, led by Morgan Stanley, will help finance construction of a data center in Sandersville, Georgia, that has been fully leased to Anviran LLC, a Meta subsidiary, under a $6.6 billion, 20-year contract. The facility is expected to begin operations in the fourth quarter of 2027, with Meta guaranteeing rent and operating expenses. Data center developers have now sold more than $3 billion of high-yield bonds so far this year, most backed by long-term leases with hyperscalers including Oracle Corp. and Amazon.com Inc.
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SoftBank's SB Energy IPO Faces Investor Test as OpenAI Timeline Clouds $50 Billion Listing
SoftBank's push to list SB Energy at a valuation of roughly $50 billion is facing a tougher investor test as uncertainty around OpenAI's IPO timeline raises questions about how much of the data-center developer's future growth depends on a single customer. SB Energy is expected to seek between $5 billion and $7 billion in an IPO within the coming weeks. The company has yet to bring a single data center online, but already carries roughly $439 billion of contracted backlog tied largely to 8.8 gigawatts of future capacity, with roughly $357 billion of that contracted revenue not expected to be recognized until 2034 or later. SB Energy generated only $138.7 million of revenue during the first half of this year, primarily from legacy solar operations, and posted a $551.6 million operating loss. OpenAI is the primary tenant for SB Energy's largest pipeline projects, while Nvidia has provided a $105 billion guarantee for the initial phase of an 8-gigawatt Ohio data-center campus, and both OpenAI and Nvidia are expected to own stakes in the publicly listed company. SB Energy estimates it needs more than $170 billion in capital spending to build its pipeline, and analysts cited in the report estimate it may need another $7 billion of equity beyond IPO proceeds, in addition to substantial debt, just to maintain its typical 10% equity contribution to projects.