The chip giant is moving deeper into the foundational layer of AI infrastructure: electricity supply. NVIDIA plans to invest up to $3 billion in Lancium, an electricity infrastructure developer backed by Blackstone, to secure multiple gigawatts of power resources for its chip customers' data center projects.

According to a report by The Information on August 7, NVIDIA has agreed to invest $2 billion in Lancium, with a commitment to add another $1 billion once the developer meets specific milestones for additional grid access. The initial $2 billion will give NVIDIA an approximately 20% stake, which could rise to around 30% if the additional investment goes through. The deal values Lancium at an enterprise value of roughly $10 billion, including debt.

The strategic intent of this investment targets the core bottleneck of AI data centers: energy. Lancium is the power infrastructure provider behind the "Stargate" AI campus being built by OpenAI and Oracle in Abilene, Texas. It has already secured and developed 4 gigawatts of power on the Texas grid, with another 15 gigawatts in projects awaiting connection. For NVIDIA, taking a stake in Lancium means securing scarce power resources for its vast customer base of chip users.

Deal structure: Staged investment tied to power milestones

According to sources familiar with the matter, NVIDIA's investment is structured in two phases. The first $2 billion directly buys about 20% of Lancium; the remaining $1 billion is tied to the developer hitting specific thresholds, including completing grid connections, which would raise NVIDIA's stake to around 30%.

Notably, this is a pure equity investment, not involving credit guarantees for data center construction or leasing. Sources indicate NVIDIA is considering providing credit guarantees for other projects, including a massive 10-gigawatt data center project in Ohio involving OpenAI and SoftBank.

The Lancium deal is the latest in a string of recent large-scale investments by NVIDIA. According to The Information, in the quarter ending April of this year, NVIDIA invested $18.6 billion in private companies and infrastructure funds, exceeding its total investment for the entire previous year.

So far this year, NVIDIA has also written $2 billion checks to cloud service providers CoreWeave and Nebius, and invested in networking equipment companies Lumentum and Coherent, as well as semiconductor company Marvell. These moves signal NVIDIA's accelerating transformation from a chip seller to a core investor in the AI infrastructure ecosystem.

Lancium's asset portfolio: From "Stargate" to multiple Texas projects

Lancium's secured 4 gigawatts of power contracts include several major projects: 1.2 gigawatts for the OpenAI and Oracle campus in Abilene, the core computing node of the "Stargate" plan; 900 megawatts for partner Crusoe's new data center in Abilene for Microsoft; 1 gigawatt recently signed by QTS Data Centers in Turkey, Texas; and another 1-gigawatt project by Crusoe in Childress, Texas.

Beyond these secured assets, Lancium is also developing land in Texas that could support up to 15 gigawatts of power, currently awaiting grid connection approvals. The company is also laying groundwork for more power land development before 2035, potentially benefiting from a proposed extra-high-voltage transmission network in Texas.

A potential variable emerged around the time of the deal's announcement. Texas Governor Greg Abbott on Monday ordered a temporary halt to new data center grid connection applications, requiring further review of such projects.

This policy shift introduces uncertainty into Lancium's expansion timeline. However, sources note that Lancium's 15-gigawatt pipeline of projects is in a relatively favorable position. Its partner utility, American Electric Power, has already completed the necessary line studies to supply power to Lancium's campuses, giving those projects a head start in the approval process.

Additionally, this financing supports Lancium's capital markets plans. Two sources said Lancium is considering an IPO in 2027, following the path of data center and infrastructure developers like Switch and CyrusOne. NVIDIA's investment not only provides ample funds for business expansion but also lends a degree of credibility to its potential public listing.