Nvidia is Using Land and Electricity Deals to Lock In Its Hardware Bundle

Nvidia is racing to lock up data center capacity for its AI hardware before its rivals do. On Friday, the company announced it had acquired a minority stake in Cloverleaf Infrastructure, its third equity investment in rapid succession in firms that secure real estate and electricity access for data centers in the U.S.

By backing the two-year-old Cloverleaf Infrastructure alongside recent stakes in Lancium and SB Energy, Nvidia is locking in near-term power rights for facilities that could use multiple generations of its chips over many years. That positioning can also help Nvidia head off what some data center developers fear is a looming chip overhang in which energy grid delays and local political pushback leave new AI hardware sitting idle without electricity.

The three deals indicate that Nvidia CEO Jensen Huang believes the best way to entrench his company’s dominant market share is to link access to Nvidia chips with the commodity that has the longest lead time: bankable electricity connections on sites that can overcome local resistance.

Nvidia is now backing some of the relatively few, best-positioned developers with multigigawatt pipelines. In the latest deal, it is effectively guaranteeing its proprietary hardware suite and software are part of Cloverleaf’s future pipeline of 10 GW of projects across the Southeast and Midwest. More projects are coming, Cloverleaf CEO Brian Janous said.

Some of these power-and-land developers have fielded multiple suitors. In the case of Lancium, Nvidia invested billions of dollars in the firm after OpenAI last quarter explored its own investment in or acquisition of Lancium, the power developer behind its Stargate facility in Abilene, Texas, according to two people with knowledge of the discussion.

Nvidia also is reportedly signing its own leases for other data center campuses. For example, after former bitcoin miner Hut 8 announced it would develop a Louisiana campus with backing from Anthropic and Google, Hut 8 leased a Texas campus to a “high-investment-grade” company that was widely reported to be Nvidia. (A spokesperson for Nvidia didn’t respond to requests for comment.)

The moves come as rival chipmakers including Broadcom, AMD and Google are seeking funding and partnerships to boost demand for their hardware, while Amazon is also trying to lock in more AI campuses for its in-house chips. Even OpenAI and Anthropic are developing their own bespoke AI server chips that aim to lessen their reliance on Nvidia’s, though those efforts are nascent.

The investment in Cloverleaf totaled hundreds of millions of dollars, people familiar with the deal confirmed, which means it is smaller than Nvidia’s recent multibillion-dollar investments in Lancium and SB Energy. (Cloverleaf’s valuation couldn’t be learned.) The difference is due to Cloverleaf’s business model of finding and selling power and land options to other developers, whereas Lancium and SB Energy do the capital-intensive work of owning and developing the sites’ infrastructure. Cloverleaf, in contrast, sells land and power rights to large firms, as it did last year in Wisconsin with Vantage Data Centers, which aims to build a multigigawatt campus with Oracle for use by OpenAI.

Nvidia's land grab looks like a bundling play. Major cloud partners like Oracle and AI labs like OpenAI and Anthropic routinely mix and match different chips, networking gear, custom cabling, and software. By taking stakes in site developers like Cloverleaf, Nvidia gains leverage to ensure upcoming facilities are designed around its full technology stack.

Nvidia said Friday that Cloverleaf will tailor its upcoming data center sites to Nvidia’s chip, networking equipment and software, bringing “power, cooling, computing and facility decisions together earlier in the design phase.”

That’s similar to the major Ohio data center site, which Nvidia announced last week with SB Energy and OpenAI, that will use Nvidia’s full technology stack. (Nvidia is guaranteeing roughly $100 billion in credit to OpenAI for the facility.)

‘Being Good Citizens’

Cloverleaf’s Janous said the Nvidia partnership could also reassure local communities that its projects will use state-of-the-art designs meant for “energy efficiency, minimizing water, and…being good citizens.”

Cloverleaf has sold more than 7 GW of ready-to-develop powered land to AI data center developers since its founding in February 2024 by Janous, a former vice president of energy for facilities at Microsoft, and Houston clean energy developers David Berry and Jonathan Abebe.

But as The Information reported this week, concerns are rising about a shortage of powered data center shells to house future AI chips. “Right now we do have a chip overhang problem” because of power delays, Janous said. “I don’t think it’s just a 2027 problem. I think it is a 2028–29 problem too, so we’re very bullish on any project that can deliver between now and 2030.”

Cloverleaf works with utilities to find power connections for nearby land that could be developed as a data center. It has been a notable skeptic of data center developers’ recent rush to set up power plants that don’t connect to the grid, saying such off-grid power is more expensive and less reliable than grid-connected sites.

But because Cloverleaf seeks access to shared public resources like utility power and water, it has faced intense community pushback on some of its recent sites, as we reported. Another issue with its business model is that it applies for permits for data center campuses that do not yet have a final owner. Communities have challenged these as secret deals where they cannot verify the ultimate operator, and Cloverleaf cannot make binding promises on behalf of the eventual owner.

Janous said the company’s projects typically involve holding numerous public meetings: “We go into these communities, and we hold open houses and invite people to come in and ask questions and to talk about water and land use. We set up websites; we give people the ability to contact us. We still have people coming to us and ask, ‘Why aren’t you being transparent?’”

Cloverleaf continues to hunt for sites. “Every year we’re turning over a quarter of our pipeline and refreshing it with the next batch,” said Janous.

Valida Pau contributed to this article.

Ann Davis Vaughan is the author of the AI Infrastructure newsletter for The Information. She is a former senior Wall Street Journal investigative reporter turned investment strategist who has tracked the energy, industrial and financial sectors for three decades.