Nvidia Eyes Apollo’s Struggling Telecom Sites To Sidestep Data Center Moratoriums: Report
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The effort centers on buildings owned by Brightspeed, an Apollo-backed broadband provider that is reportedly nearing bankruptcy.Nvidia staff has also discussed with suppliers the possibility of beginning building retrofits with Vera Rubin racks in the first quarter of 2027, the report said.The approach has taken on added urgency after Tuesday’s midterm elections, in which Democratic candidates in states including Texas called for moratoriums on new data centers.Nvidia is pursuing a plan to turn existing telecom facilities into small AI data centers as a way to deploy its chips more quickly and sidestep growing local resistance to new construction, The Information reported on Thursday.According to the report, the chipmaker has approached private equity firm Apollo Global Management (APO) about establishing a network of such facilities that could span as many as 20 U.S. states. The effort centers on buildings owned by Brightspeed, an Apollo-backed broadband provider that is reportedly nearing bankruptcy and operates more than 130 sites originally used for voice and data traffic.NVDA stock closed down 9% on Thursday, clocking its worst day since January 2025, amid a broader drop in chipmaker stocks, driven by regulatory fears centered on data center buildout. The Kobeissi Letter noted that the stock is now trading at a forward price-to-earnings ratio of about 13x, below S&P 500’s average of 20x. “Ironically, the name at the forefront of the AI buildout is now one of the "cheapest" stocks in the market,” the firm said.Power Capacity And Chip PlansMany of the Brightspeed buildings already have sufficient electrical capacity, with the portfolio totaling roughly 1 gigawatt of available power, The Information said, citing people familiar with the matter. That capacity could support tens of billions of dollars’ worth of Nvidia’s upcoming Vera Rubin servers. Nvidia submitted a written proposal to Brightspeed on Wednesday and has requested additional data plus site visits.Nvidia staff has also discussed with suppliers the possibility of beginning building retrofits with Vera Rubin racks in the first quarter of 2027, the report said. The plan could also incorporate technology from Groq, the AI startup whose technology Nvidia licensed last year.Bypassing New-Build RestrictionsThe approach has taken on added urgency after Tuesday’s midterm elections, in which Democratic candidates in states including Texas called for moratoriums on new data centers. Retrofitting existing structures would still need local permits for upgrades such as specialized cooling, but fewer approvals than ground-up construction, The Information noted.Nvidia has described the proposed sites as an “inference network” intended to run already-trained models rather than support large-scale training clusters. It remains unclear who would ultimately purchase or lease the chips for these facilities, the report said. Separately, Apollo recently agreed to buy tens of billions of dollars of Vera Rubin chips to lease to SpaceX, making it one of the largest buyers of AI servers.Potential users could include cloud providers and AI developers such as SpaceX, Anthropic, and OpenAI, which face server shortages and power constraints, though The Information said it is not clear whether Nvidia or Apollo has engaged those companies on this specific proposal. The report also noted that it is unclear how many Brightspeed buildings Nvidia wants to retrofit.Zac Smith, CEO of AI networking firm Datum, told The Information that older telecom buildings can unlock underutilized power but are sometimes costlier to run because of aging equipment. He noted recent interest from cloud and AI firms, including Anthropic, in smaller pockets of power capacity in existing structures. Anthropic has cited server shortages as a top business risk and has committed hundreds of billions of dollars to leases.How Did NVDA Retail Traders React?On Stocktwits, retail sentiment around NVDA stock jumped from 'neutral' to 'bullish' territory over the past 24 hours, while message volume stayed at 'high' levels.NVDA stock has dropped 3% year-to-date. Read More: Amazon-Uber Eats Deal Sends DASH Stock To Biggest Drop In A YearFor updates and corrections, email newsroom[at]stocktwits[dot]com.
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