The world's largest data center faces funding difficulties! SoftBank's SB Energy IPO delayed, its $50 billion valuation questioned.

SoftBank's SB Energy's IPO plans have suffered a major setback, reflecting a crack in Wall Street's confidence in the AI data center boom.

According to The New York Times, SB Energy originally planned to complete its IPO this month, but due to investor concerns about its target valuation of $50 billion or more, underwriting banks have so far struggled to attract enough buyers within the price range set by the company and its advisors, and the listing timeline has been postponed to mid-to-late October. This change directly threatens the project's funding and raises questions about whether the planned world's largest data center can be completed on schedule.

Behind the IPO delays lies a growing public backlash against data centers, spreading from the community level to the capital markets. Investors' increasing skepticism about the data center industry's growth prospects and construction risks is forcing companies and their advisors to reassess their plans to raise hundreds of billions of dollars in the public market. Meanwhile, nuclear energy company Holtec also announced last week that it was indefinitely postponing its IPO, citing "uncertainty surrounding data center development" as the primary reason.

SB Energy: Ambitious, yet with zero operational record

SB Energy, a subsidiary of Japan's SoftBank Group, plans to build and operate a data center in Ohio. The project will eventually reach a capacity of 10GW of IT load, making it the world's largest data center. To support this goal, the company plans to build 10GW of new power generation capacity, including 9.2GW of natural gas-fired power.

The project's business logic is highly dependent on a single customer: the entire data center will be leased to OpenAI, which expects to accumulate a revenue backlog of $439 billion over approximately 20 years starting in 2028.

However, the core issue that makes investors hesitant is that SB Energy has yet to put any data centers into operation. This lack of operational track record, coupled with the company's pursuit of a valuation exceeding $50 billion, is one of the main concerns for institutional investors.

Last week, SB Energy attempted to boost investor confidence by scheduling a conference call, inviting OpenAI CFO Sarah Friar and infrastructure head Sachin Katti to discuss the prospects of its Ohio data center project. Some investors believed this move itself indicated that the company was aware of market concerns. However, this effort ultimately failed to prevent the IPO from being postponed.

Nvidia has reduced its support for its financing structure due to pressure.

Prior to the IPO being thwarted, there were signs that the project's financing arrangements had loosened.

Nvidia reportedly initially planned to provide up to $250 billion in support for the SB Energy project, but after facing investor concerns about its risk exposure, it has significantly reduced its "residual value guarantee" arrangement to $105 billion to help lower the project's debt costs. Nvidia's direct equity investment in SB Energy has also been reduced from the previously reported $3 billion to $1.5 billion.

The funds raised in the IPO are crucial for the continued development of the project. Analysts point out that since the listing plan cannot be easily canceled, SoftBank may ultimately have to significantly reduce its valuation, shrink the issuance size, and seek new sources of capital under more stringent terms, thus creating a vicious cycle.

Caught between public boycott and political risks

SB Energy's predicament is not an isolated case, but rather a microcosm of the systemic pressures facing the entire data center industry.

For months, public opposition to data centers has been building, particularly in rural areas where residents have expressed strong dissatisfaction with the water consumption, air quality, and grid burden caused by these large-scale, power-consuming facilities. Ohio is rapidly becoming the epicenter of this political controversy, and SB Energy's project happens to be located there.

Political uncertainties are equally significant. New Mexico's Democratic gubernatorial candidate and former U.S. Interior Secretary Deb Haaland has publicly stated that if elected, he will halt all new data center projects and demand developers invest heavily in renewable energy. Meanwhile, Texas Governor Abbott recently ordered a halt to new data center construction as well.

In the capital markets, only two publicly traded companies focused on data center construction, Equinix and Digital Realty Trust, have seen their share prices fall by 1% to 2% this month. According to The New York Times, citing sources familiar with the matter, data center companies were originally expected to account for about one-third of new share issuances for the remainder of 2026, but the current market climate is putting that expectation to the test.

OpenAI's Stargate project faces a chain of risks.

The obstruction of SB Energy's IPO has an impact that extends beyond the scope of a single project.

This project, along with Oracle's "Project Jupiter" (planned capacity 4.5GW) in New Mexico, is a core pillar of OpenAI's "Stargate" computing power construction plan, with a combined planned computing power of over 10GW.

According to reports, the $18 billion leveraged loan for Project Jupiter has recently fallen to 89 to 91 cents of face value, a level considered "stressed," due to factors including strong local community opposition to water and air quality issues, as well as the New Mexico State Land Office's refusal to approve the application to lay the natural gas pipeline.

At the same time, the decline in AI token prices and the encroachment of Chinese open-source big models on the market share of US cutting-edge models are exacerbating investors' concerns about the commercial prospects of OpenAI, which in turn affects their confidence in related infrastructure projects.

If both of these projects experience significant delays or even stall, it will have a substantial impact on OpenAI's IPO plans and a profound influence on the entire AI infrastructure investment narrative.

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