September 3, 2026
A multibillion-dollar stake from a key counterparty raises hard questions.
When a supplier takes a multibillion-dollar equity stake in a customer’s IPO at the offer price, one of two things is true. Either the investment is the most credible validation money can buy, or it is a circular structure dressed up as independent demand. With SB Energy, working out which interpretation is correct may be the most important question in the offering.
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The Bull Case
SB Energy recorded a 66.4% revenue jump in the first half of 2026 as it filed paperwork for its U.S. IPO. The growth rate is real, even if the base is small. More consequential is the architecture of commitments surrounding the company. SB Energy reports approximately $439 billion of backlog under binding contracts, including about $430 billion from data centers. That figure is not a wish list. The data-center contracts carry a weighted average remaining term of 19.6 years, and OpenAI has signed 20-year leases covering approximately 4.25 GW-IT across the initial PORTS-Pike Technology Campus phase in Pike County, Ohio.
Nvidia’s involvement goes well beyond writing a check. In August 2026, Nvidia disclosed a set of residual value guarantees capped at $105 billion to provide credit support tied to leases for approximately 4.25 gigawatts of IT load at SB Energy’s PORTS Technology Campus in Pike County, Ohio, on behalf of an OpenAI affiliate. The chipmaker also has the option, in its discretion, to support additional capacity later on. For bulls, this is the crux: Nvidia is not merely speculating on SB Energy’s ability to build data centers. It is providing a credit backstop designed to help finance the largest campus. That is a structurally different commitment from a passive cornerstone investment.
SB Energy CEO Rich Hossfeld made the logic plain. “The reason Nvidia is on our part of the equation here is that it helps us to unlock things like investment-grade financing. It helps to ensure the project is a success,” he told CNBC. Access to financing at investment-grade rates on assets of this scale is itself a competitive advantage almost no rival can replicate.
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The Bear Case
Strip away the headline numbers and what remains is a company with a net loss of $3.21 billion on revenue of $138.7 million for the six months ended June 30, compared with a net loss of $215.5 million on revenue of $83.3 million a year earlier. The loss grew far faster than revenue. No data center capacity is currently operational, and the company’s first data center revenue is expected to arrive only in the fourth quarter of 2026.
The backlog’s composition deserves close reading. Only about $1 billion of the $439 billion is expected to convert into revenue over the next 24 months, while roughly $357 billion sits beyond year eight. A contracted figure that mostly lands a decade from now is better described as a development pipeline than a revenue schedule.
The concentration risk compounds the execution risk. Among the risk factors listed in the filing, SB Energy said it is “substantially dependent” on the performance of OpenAI as both a tenant and equity investor. OpenAI is simultaneously a customer and the source of the company’s largest single campus commitment. OpenAI and SoftBank are also expected to generate a meaningful share of early lease revenue, raising related-party concerns. Nvidia buying equity at the IPO price while also serving as the residual value guarantor on the same campus tightens that web further. If any one of these relationships shifts, the whole structure is exposed.
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Where the Evidence Leads
The bear case is not that SB Energy’s assets are worthless. It is that a reported valuation above $50 billion prices in two decades of near-perfect execution before a single data center has switched on. As IPOX Research Associate Lukas Muehlbauer put it, “Investors have to be convinced that hundreds of billions of contracted demand can be turned into cash flow over the coming years.”
Nvidia’s multibillion-dollar IPO investment and its $105 billion residual value guarantees do provide genuine credibility. But they also mean Nvidia has a financial interest in the IPO succeeding at a price that validates SB Energy’s assets. Treating the stake as clean third-party validation ignores the fact that the validator and the customer are the same party. The guarantees matter more than the equity check, because they sit at the asset level rather than the offering level. Investors should weight them accordingly and treat the equity commitment itself as information about Nvidia’s strategic intent, not as independent price discovery.
SB Energy aims to raise between $5 billion and $7 billion in the offering, the Wall Street Journal reported. At a $50 billion valuation, the market would be pricing roughly 90 times annualized first-half revenue on a business where data center revenue is still zero. That is a bet on execution across an extraordinarily long contract runway, anchored by counterparties with their own financial interests in the outcome. The backlog is real. The circularity is also real. Both need to be in the price.
