OpenAI Seeks Funding for Massive Data Center as New York Enacts Moratorium
OpenAI and Nvidia are in discussions to fund a massive new data center project through a backstop deal. Separately, New York State has enacted a one-year moratorium on the construction of large new data centers, citing concerns over electricity costs, water usage, and community impact. This pause applies to facilities consuming at least 50 megawatts.
OpenAI and Nvidia are reportedly in talks to secure hundreds of billions in funding for OpenAI's plan to lease a massive new data center. According to CNBC, this deal would involve Nvidia providing credit as backing strength, enabling OpenAI to raise debt for the project's lease and construction. The companies are also discussing the use of Nvidia chips within the facility, which is projected to cost $500 billion and consume power equivalent to 8 million U.S. households.
In related news, New York became the first U.S. state to enact a temporary halt on large new data center construction. Governor Kathy Hochul announced a one-year moratorium on facilities expected to consume at least 50 megawatts of electricity. The decision was driven by concerns over increased electricity costs, strain on water resources, and pressure on local communities, with the governor also pursuing legislation to repeal New York's sales tax exemption for hyperscale data centers. The state's Department of Environmental Conservation will not issue discretionary permits for covered projects during this period, unless applications were already deemed complete.