Nvidia sells Meta its racks. As of this week, it is also buying Meta's shares, three billion dollars' worth, to help pay for them. Vendor financing with extra steps. I'll allow it, but I'm writing it down. You're listening to The Data Center Daily. It's Wednesday, October 28th. Up first, Meta's plan to raise up to 95 billion dollars in stock for its buildout, and the chipmakers lining up to buy. Then North Carolina's governor and attorney general say Duke's data center deal leaves out the power plants, CenterPoint shows how much Houston load is still parked in ERCOT's Batch Zero, and CAISO's board takes up its large-load rules today. Hit follow and you won't have to come looking for the next episode.
Maria Deutscher, writing for SiliconANGLE:
The fundraising initiative, which the company announced today, will kick off with a series of transactions cumulatively worth $35 billion. About two-thirds of that sum will come from the sale of common stock. Meta said Nvidia Corp., Advanced Micro Devices Inc. and Broadcom Corp. had expressed interest in buying up to $5 billion of the shares.
Meta announced the plan on Monday, October 26th. After the 35 billion in underwritten deals comes an at-the-market program of up to 60 billion, starting early next year. Part of the first tranche is 12.5 billion dollars of mandatory convertible preferred, which turns into common stock on August 15th, 2029. On Saturday we covered Meta's 825 billion in future commitments and a credit-risk gauge at a record. Two days later the answer is shares, not more bonds. That's a choice, and it says something about how much more debt the market wanted to see. Then on Tuesday, per The Motley Fool, Nvidia said it plans to put 3 billion dollars into the offering, alongside an expanded technical partnership on Muse, Meta's AI assistant. Meta says it will expand its deployment of Vera Rubin GPU systems, Vera CPUs and Nvidia networking. Tech Times reports AMD committed 1 billion of its own. And how much more hardware? Nobody says. Even the Fool's writer notes the announcement doesn't quantify the added purchases. So the supplier writes a check, and the customer promises to keep buying an unspecified amount. Tell me again who's financing whom. On where the money goes, SiliconANGLE points to four superclusters, each expected above 1 gigawatt. The largest is Hyperion in Louisiana at 5 gigawatts, where Meta will commission 10 new power plants to meet the load. It's built in a joint venture with Blue Owl, which has committed 7 billion. The Texas supercluster is planned through a similar partnership with BlackRock. Ten power plants for one campus. That's the line I'd want Louisiana regulators reading, not the share count. Wells Fargo analysts, quoted by Tech Times, say the raise likely fulfills their estimate of a 60 to 80 billion dollar financing gap for Meta's 2027 AI spending. Tech Times also reports the offering is expected to close tomorrow.
Laura Leslie, writing for NC Newsline:
Stein called the proposal “a step in the right direction,” but said it’s inadequate because it doesn’t require data center owners to help pay for any new power plants the state will have to build to supply their needs.
Governor Josh Stein and Attorney General Jeff Jackson made that case to the North Carolina Utilities Commission on Tuesday. The deal they're reacting to is the large-load tariff Duke announced on October 7th, which we covered on the 9th. It has data centers pay for grid upgrades like transmission lines and substations, and per the state Justice Department, Amazon, Meta affiliate Andale, Google, Microsoft and the Defense Department have agreed to it. The commission still has to vote, and no date is set. So the wires are covered and the generation isn't. Stein's number on generation: a state task force report puts the cost of the added power data centers need by 2050 at about 50 billion dollars. His other figures: load growth over the next 15 years at least five times the previous 20, with data centers about 80 percent of projected demand. He wants the commission to consider requiring data centers to build or bring their own clean energy. If half of new large customers did that and operated flexibly, he says, ratepayers save 20 billion. Jackson goes further, and I'm with him. A separate rate class for large data centers, apart from residential, commercial and industrial. If you draw like a small city, you get your own line on the rate sheet. Both still urge approval of the deal as a starting point. Duke spokesperson Bill Norton didn't address their specific recommendations, pointing instead to the Carolinas Resource Plan and the recent large-load settlement.
Marcus Reyes, writing for Data Center Feed from CenterPoint's third-quarter filings:
The short version, from the company's own documents: CenterPoint Houston Electric estimates that about 10 GW of base load and about 2 GW of studied load remain in Batch Zero. Its investor presentation lists the system's current peak demand at 21 GW.
CenterPoint reported on Tuesday, October 27th, and raised its 10-year capital plan by 4 billion dollars to 70.7 billion, pulling 1.5 billion into the first five years. Batch Zero is the first set of projects through ERCOT's new large-load process, which the Texas PUC approved on June 18th. Ten gigawatts of base load against a 21 gigawatt peak. On paper, that's another half of Houston. But the paper keeps shrinking. In July it was more than 17 gigawatts submitted and 14 expected to be eligible. Now it's about 12. The slides show about 3 gigawatts energized by 2027, 8 by 2028, 11 by 2029 and 12 by 2030. That's labeled expected, not committed. ERCOT is expected to set Houston's base-load amount in December, and studied-load allocation comes in April 2027, possibly below what's eligible. The cash is where you see who's serious. About 290 million dollars in contributions in aid of construction last quarter, about 600 million in posted security, and 135 million of that security returned. The filing doesn't say whose, or why. I'd love to know. CEO Jason Wells says the growth brings about 5 billion dollars in savings to Texas residential and commercial customers over the next decade. The release doesn't show how that figure was calculated, and Wells first tied it to the 14 gigawatt estimate back in July.
Junde Liu, writing on the Compute Law blog ahead of today's meeting:
Under the staff proposal, a large load is an end user at one site that connects directly to the CAISO grid and has peak demand of 50 megawatts or more.
CAISO's Board of Governors votes on this today. It's California's response to FERC's June 18th show-cause order, the same track behind the ATC and MISO filings we've followed. FERC preliminarily found CAISO's tariff didn't define a large load, set no clear study process and did too little to keep costs from shifting. And the definition already has a fight in it. PG&E objected, and CAISO says it's working with the utility and the state commission on new wording. That's the same PG&E we covered Monday, listing large load beyond 1.8 gigawatts as work to delay or defer. The mechanics: utilities keep running the studies, targeted at 60 to 90 days, with CAISO reviewing new requests monthly. Operating sites send hourly forecasts, with the next day due by 7 a.m. Pacific, plus live draw data. When the grid is at risk, CAISO orders a cut and the utility carries it out. There's also temporary service, letting a site connect early and draw only what the grid can carry until its upgrades are built. On cost, the utility subtracts a site's upgrade payments before costs go into the regional charge every CAISO customer pays. And CAISO would publish expected additions, the upgrades they need and a cost estimate for each. Public numbers. I'm for it. A vote is not a tariff. Revised language posts tomorrow, comments are due November 4th, and the FERC filing is due November 16th. Permanent flexible service and generation serving nearby large sites wait for a later process, set to open in the first half of 2027.
If the Muse half of that Nvidia deal is more your territory, our sister show AI Daily Briefing has the top AI news for engineers, founders and investors every weekday, sorting real capabilities from demo hype, quickly. Look for AI Daily Briefing in the app you're using right now.
By tomorrow I want to know how the CAISO board voted, and whether that 135 million in returned security ever gets a name attached. We'll be back tomorrow, Thursday. That was The Data Center Daily, one of the Lantern Podcasts. See you then.