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With 100% private funding of sovereign AI infrastructure on federal land, SoftBank’s SB Energy investment of $4.2 billion and $33.3 billion in Japanese funding, will enable AEP Ohio to upgrade and build new transmission lines and substations for a projected 9.2 GW of natural gas generation buildout. Skepticism is strong about the size and scope of the AI Data Center, given supply chain and power constraints.
Last week, crews reached a milestone in deactivating legacy laboratory facilities at the site of what is projected to be a 10 GW “AI Data Center,” newly rebranded from its previous name of “PORTS Technology Campus.” Located at the U.S. Dept. of Energy’s Portsmouth Gaseous Diffusion Plant (GDP), the 189-acre plot of leased federal land is undergoing environmental remediation of what used to be the a Cold War-era uranium enrichment site in Piketon, Pike County, Ohio. Touted as the world’s largest AI data center, the site is being physically cleared for construction by what is said to be 10,000 workers, with projections of 2,000 permanent positions by the time the project is completed.
Concurrent with the deactivation last week was the release of the Dept. of Energy’s “special report,” which offered more transparency about how the public-private partnership will function, including specific land-lease terms.
What’s most interesting about this project is the private-public funding construct, with $33 billion in Japanese funding and purportedly a possible $500 billion partnership with the Japanese long term. On a video posted on the Office of Environmental Management’s website, U.S. Secretary of Commerce Howard Lutnick said, “this is not a project with debt, or a project that won’t finish. This is a unique model in the world – a first of its kind – this will produce reliable, affordable energy in the United States of America.”
The project aims to include 9.2 GW of natural gas generation (by 2037), and $4.2 billion in grid upgrades and investment in new transmission lines, with SoftBank’s Son promising not to raise customer rates. “I will commit right here, right now, to protect the electricity bill,” Son said in the video.
There is skepticism, as any project requiring 9.2 GW of natural gas generation will demand a massive amount of specialized equipment, like large-scale gas turbines , which according to Institute for Energy Economics and Financial Analysis (IEEFA) reports, are heavily backordered because “GE Vernova, Siemens Energy, and Mitsubishi Heavy Industries (MHI) face extensive production backlogs and are advising developers of new gas-fired projects to plan seven to eight years ahead of turbine procurment.” SoftBank’s SB Energy countered that skepticism with claims it has enough long-lead high-voltage electrical equipment to fulfill 9.2 GW of power, toward which it will invest $33 billion. The claim was made following a February meeting at the White House, where the $550 billion U.S.-Japan deal was announced. In exchange, the Japanese will purportedly get a 15% tariff cap on “most imports.”
Tim Walsh, assistant secretary, Office of Environmental Management, referred to this project as a “blueprint” for what the DOE could do at other government sites. He said that by leasing the land in Portsmouth, SoftBank and SB Energy will “accelerate the clean up for us,” which he says will include $200 million for environmental remediation. U.S. Secretary of Energy Chris Wright, in the same video, added “We’ve got to find the right communities, with the right local laws, the right workforce, and attitudes, and the right size and scale where we can develop an industrial facility,”
According to Wright and SoftBank Group Corp. Chairman and CEO Masayoshi Son, the AI Data Center is going to be a “center of superintelligence,” with Wright saying, “this will be a giant factory and ecosystem to build intelligence. We will take electricity and turn it into innovation, into opportunity, and into medical advancements so that cancers become manageable conditions rather than death sentences.”
Rich Hossfeld, SB Energy Co-CEO talked of the scale of the project, with a prediction “there will be more knowledge, more compute here than anywhere in the entire current world capacity. More than ChatGPT, more than Gemini, more will be based here in Ohio.”
Energy analysts and local reporting increasingly question whether a project of this magnitude can actually be executed as planned. For example, Dennis Wamstead, energy analyst with the Institute for Energy Economics and Financial Analysis (IEEFA), expressed that “at the size they’re talking about” he doesn’t see how the builders of the plant can secure equipment, permits, and room on the grid “any time soon.” He noted that Ohio’s entire power generation capacity in 2024 was said to be 30 GWs, meaning the addition of 10 GW of new, localized generation, would be one-third of that, for just one county.
The Dept of Energy emphasizes that the private-sector funding, on-site power generation, and grid-strengthening infrastructure will be enough to fund the project and ensure it grows at a pace that drives the U.S. leadership in AI.
