Tech stocks slide as Meta trial begins and Nvidia secures $105bn Ohio data centre deal
Nvidia announces massive financing for OpenAI and SB Energy facility, while Micron shares surge past $1,000 on memory chip demand
Tech stocks declined on Tuesday, with the Nasdaq Composite dropping more than 1% and the Philadelphia Semiconductor Index falling over 5%. The sell-off coincided with the commencement of a high-stakes trial for Meta in Oakland, California, and significant capital commitments from Nvidia in the artificial intelligence infrastructure sector.
Meta is facing a lawsuit from 29 state attorneys general alleging the company designed its platforms to harm children’s mental health. The trial, presided over by District Judge Yvonne Gonzalez Rogers, involves testimony from Meta CEO Mark Zuckerberg and Instagram CEO Adam Mosseri. Plaintiffs argue that Meta utilised psychologically manipulative features, including infinite scroll and autoplay, to maximise young users’ time on its services.
Meta has claimed potential damages of up to $1.4 trillion in the proceedings, a figure disputed by the state attorneys general. The states allege that the company knew its apps contributed to increased instances of anxiety, depression, and suicide among users but misled the public regarding product safety.
In a major development for the semiconductor sector, Nvidia announced a $105 billion agreement to finance an OpenAI and SB Energy data centre in Ohio. The facility, known as the PORTS-Pike Technology Campus, will initially offer 4.25 gigawatts of computing capacity, with an option to increase by 3.75 gigawatts. The complex will exclusively use Nvidia chips.
Nvidia will provide $1.5 billion in investment to SB Energy as part of the arrangement, which includes a 20-year lease for OpenAI. CEO Jensen Huang stated the deal does not constitute circular investing, aiming to secure critical inputs for long-term productive capacity. The deal could total as much as $600 billion for Nvidia when combined with prior agreements.
Meanwhile, Micron shares rose above $1,000 amid strong demand for memory chips. JPMorgan strategist Jay Kwon noted that hyperscaler demand is poised to keep the memory chip crisis driving up prices for at least two years. The stock has rallied 36% from its July 29 lows, crossing the $1,000 level for the first time since July 6.
In the broader AI landscape, OpenAI launched ChatGPT for Teens with enhanced safety features, including built-in protections and prompts to take breaks. Rival Anthropic reportedly saw quarterly revenue jump 14 times to $11.5 billion, with investors targeting a $2 trillion valuation for a potential public listing in September or October.
