"Big Tech companies are promising that AI models and apps are about to revolutionize business, and executives like OpenAI CEO Sam Altman say the greatest barrier to that happening is a dearth of data centers to run the models that businesses will soon need to operate. Big Tech companies are also challenged to find enough new energy sources to power and cool the massive data centers."
"The tech companies are now racing to plan and finance the new data centers. And this is creating some unique arrangements. Nvidia announced Monday it will invest $100 billion in OpenAI, which will buy about 2% equity in the company. But OpenAI will likely use most of that money to buy Nvidia GPUs, or graphics processing units, the chips that represent the greatest single capital expenditure of building a data center."
Nvidia committed major capital tied to OpenAI that secures chip sales and an equity position, positioning the GPU maker to shape AI infrastructure and product direction. Large technology firms plan massive data-center investments exceeding $325 billion by the end of 2025, while Anthropic projects roughly $100 billion over the next decade. GPUs represent the largest single capital expenditure in building data centers, driving demand for chips and for new power and cooling capacity. The pace of data-center construction and energy sourcing presents a bottleneck. The financing arrangements raise concerns about circular investments and related-party conflicts, even as the industry favors very large models while smaller models retain practical appeal.
Read at Fast Company
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