Data Centers Powering the AI Future  ## Metadata - Author: [[Hard Fork AI]] - Full Title: Data Centers Powering the AI Future - Category: #podcasts - URL: https://share.snipd.com/episode/1c71c0e7-e846-4524-b76b-152d688320db ## Document Notes ## Highlights - **Massive Stargate Data Center Buildout** - OpenAI is building five new Stargate data centers with Oracle and SoftBank across the U.S. in a major capacity expansion. - The planned capacity is about seven gigawatts, roughly powering over five million homes. Transcript: Jaeden Schafer OpenAI has said that they are building five new Stargate data centers with Oracle and SoftBank. This is massive from a company that is already doing so much with the Stargate project. Just on Tuesday, they announced this. They're going to build all of these. They're going to be in the United States. And I know that they've mentioned they're going to do other Stargate projects, other places. These five are just still in the United States. The new data centers are going to have a planned capacity of about seven gigawatts. This is absolutely massive. That's enough energy to power more than 5 million homes. ([Time 0:00:01](https://share.snipd.com/snip/afae0894-719e-4f3e-947b-dc1400cd322d)) - **AIbox.ai No-Code Builder Mention** - Jaeden Schafer described AIbox.ai, a no-code builder that links models, prompts, and UI to build tools. - He invited listeners to try the beta and access 40+ models in a single playground for a subscription. Transcript: Jaeden Schafer We've just launched a beta of our builder, which is a platform where you can describe a tool you want to build, whether that's a newsletter generator, whether that's some sort of tool That you use internally in your organization you know how you use ai to automate your processes you can describe what that tool might look like and it will automatically link together The ai models put in the prompts build the front end ui and create that tool for you so you can automate your processes using ai you also on the platform get access to the top 40 ai tools on Our playground so if you want to chat with chat GPT or Anthropic and mix between them, use the image generators and audio generators all in one chat thread without having to pay subscriptions To all the different platforms, you get access to that as well on the AI Box playground. ([Time 0:00:53](https://share.snipd.com/snip/facb36ba-5f2c-4c69-be80-9bd188b19a30)) - **NVIDIA's Strategic Investment Cycle** - NVIDIA is investing heavily to support data center GPU demand, committing to large investments tied to AI infrastructure. - That investment fuels a cycle where data centers will be filled with NVIDIA GPUs, aligning vendor incentives with buildouts. Transcript: Jaeden Schafer So go check it out, AIbox.ai, but let's get into the rest of the episode today. So the new sites for the current project or that the five new that just got announced are going to all be in interesting places. So there's Shackelford, Texas, Donna Anna, New Mexico. There's one in the Midwest and there's two others that are being built with SoftBank in Ohio and Milam County, Texas. So we're seeing a lot of like New Mexico, Texas, Ohio, and some in the Midwest, kind of all over the place, not a lot on the East or West coast specifically, which is interesting. And these new projects are part of this massive infrastructure build out that they're doing. And what's interesting is all of this is coming as a lot of people are asking like, how are they going to spend all of this money? How are they, or how are they going to raise all the money to fund this? Right. Like, like open AI essentially is becoming a data center, um, creator, which is really interesting. And a lot of this comes back to Nvidia. So Nvidia said that they are planning to invest a hundred billion dollars into opening AI specifically just on Monday, they announced this. Um, and this is all part of the deal for this data center build out. So basically it's interesting because up until this point we've seen that nvidia they invest money into all ai all the big ai startups 11 labs and foropic like they they put money into All the big ones because they know they're gonna have to buy their gpus and this is interesting because it's moving just from okay you need our gpus to train your models to like we know You need to buy our GPUs to fill up an entire data center or multiple data centers. ([Time 0:01:36](https://share.snipd.com/snip/50705b7b-7b92-4ed4-a228-24d971b89fcb)) - **Circular Deals Inflating Valuations** - Large companies are creating circular financial relationships: investments, LOIs, and compute deals feed each other's growth. - That loop is inflating valuations and moving stock prices dramatically for firms like Oracle and NVIDIA. Transcript: Jaeden Schafer Now, the controversy that a lot of people have talked about is the stock implications of a lot of these deals. Because we have Oracle making a lot of these new deals. Oracle also just announced that they were signing a $300 billion deal with OpenAI, where OpenAI was going to pay them $300 billion for compute. And this, of course, was controversial because it wasn't like Open I wired them $300 billion. They don't have that much money. Um, they sent, give them a letter of intent that in the next like three years or four years, I think that they're going to want to do this deal. So what's interesting to me is that we kind of have this moment where, um, it feels like Nvidia is giving money to open AI to build data centers. Open AI is giving money to Oracle to also build them data centers. And Oracle is giving money back to NVIDIA and OpenAI as investments. All of these different companies, it's like a giant circle of everyone is giving each other money or letters of intent. So not even money, but like, hey, I'm putting this down that I want to buy it. And when this is happening, the stock prices of these companies are going crazy. ([Time 0:03:21](https://share.snipd.com/snip/bba298a9-87c6-48fd-a652-9dac4b10fa2e)) - **Organizational Shift At Oracle** - Oracle's rising valuation and AI deals triggered leadership shifts and expansion moves within the company. - The company is repositioning executives and preparing to scale cloud and AI infrastructure aggressively. Transcript: Jaeden Schafer So Oracle, because of this, has had a bunch of shakeups. They just announced that two of their presidents are going to, basically their CEO is moving into a new role and they have got two new presidents to co-CEO the company. Obviously, this thing is growing into an entire beast of its own. I mean, their stock doubled in the last six months alone. So Majuric joined Oracle in 2014 from AWS, and he was a founding member of Oracle's cloud engineering team. So he's going to be one of the new co-CEOs. And then we also have Mike Silke, who's also going to be a co-CEO. And Silke has served as the president of Oracle's industries division since June. He had a bunch of other different roles with the company. And he actually came to Oracle through an acquisition of Primavera Systems back in 2018. So Safra Katz, who is currently the CEO and has been since 2014, is going to move into a role as the executive vice chair of Oracle's board of directors. So we're seeing this trend where the company is just exploding. And some people say it's dubious, these $300 billion LOIs, but the company is exploding. ([Time 0:05:26](https://share.snipd.com/snip/c2022b4e-175f-47bf-922c-0124ec3ab055)) - **Raise Capital Using LOIs And Bonds** - Use strategic financial instruments like corporate bonds and LOIs to fund long-term infrastructure builds. - Oracle plans to raise $15 billion via bond sales now that its valuation and LOI visibility support large capital raises. Transcript: Jaeden Schafer So with that, Oracle is now going to be raising 15 billion dollars in corporate bond sales which is interesting um and also like 15 billion dollars in corporate bond sales today versus Six months ago is massive they're literally their stock price doubled so they're able to they're able to get a way better valuation on this um you know they've been known as a cloud infrastructure Giant for a very long time and they're going to be doing this through corporate bond sales that's according to reports out of Bloomberg. And this could actually happen this year. This is the second biggest bond sale this year that Oracle will be doing. And this could include up to seven different parts with potential for one of those to be uncommon 40-year bonds. That's according to Bloomberg. So all of this is right after OpenAI signed that massive $300 billion LOI. When they got that right, so OpenAI is like, all right, here's a $300 billion LOI. Everyone was asking like, where are they going to get the money to build the compute? Because that's just an LOI. They have to go and build the compute, but using that LOI, they can now raise these corporate bonds. ([Time 0:07:02](https://share.snipd.com/snip/51cad966-e4f6-4f44-8c64-b4c9cf931278)) - **Multiple Big Compute Deals Validate Demand** - Even smaller compute deals (e.g., $20 billion with Meta) are significant amid larger headline LOIs. - These agreements cumulatively validate demand for vast AI compute capacity across major tech firms. Transcript: Jaeden Schafer They, their stock prices up. Like they have a lot of, all of a sudden everything exploded. So now they have the tools because publicly there's this $300 billion LOI. They now have all the tools they need to go and raise the money and actually build this, which is interesting. And also apparently they're in talks with meta for about a, for about $20 billion worth of compute as well, which a lot of people are like, Oh, it's only $20 billion. Like that's nothing, you know, opening. I just did a 300, but like $20 billion of compute. ([Time 0:08:08](https://share.snipd.com/snip/f86e3d48-b9c0-4740-9c1e-b3c65a4ea8ba)) - **Data Center Energy And Grid Impact** - The planned seven-gigawatt capacity raises concerns about grid strain and rising local energy costs. - Jurisdictions may offer incentives or allow on-site power plants to manage the energy needs of massive data centers. Transcript: Jaeden Schafer And I just want to bring you back to something I said at the very beginning of this episode, which is that these new data centers are going to be seven gigawatts. So that is enough energy to power more than five million homes. Like these data centers are going to, um, are going to be insane. This is going to be massive. A lot of energy consumption. A lot of people in America, I will say are complaining that the cost of energy is going up dramatically because of data centers. Um, and so it's sort of another point of controversy where if you look at certain jurisdictions are giving these data centers tax breaks or basically incentives to build their data Centers, they're giving them cheaper electricity, they're tying them straight into the grid. I believe the current Trump administration has, I don't know if anything has happened here, but they've talked about allowing the new data centers that are being built to also build Power plants on site to that. Because basically, if OpenAI goes and builds these five new ones that could use the same amount of energy as 5 million homes, pulling that from the grid could be pretty rough. And so we need more energy production. So I'm not sure what OpenAI's plan is for that. I sure hope that they're planning on building out their own energy production along with the data centers. So it'll definitely be something we'll have to, to look at. ([Time 0:08:56](https://share.snipd.com/snip/0ef20a44-1bc8-4065-af03-d14491db017b))