Power & Sites · United States

AOI Raises $588M to Fund Manufacturing Expansion

Credited to Converge Digest · convergedigest.com · 2d ago

Photograph · Converge Digest

Applied Optoelectronics ( NASDAQ: AAOI ) has completed a previously announced $600 million at-the-market equity offering program, raising approximately $588 million in net proceeds as the optical component manufacturer expands production capacity for high-speed data center connectivity. AOI sold 5,694,845 common shares at an average price of $105.36 per share. The offering, first disclosed on August 21, represents the company’s third ATM equity program completed this year.

The new capital arrives as AOI scales manufacturing for 800G and 1.6T optical transceivers targeting hyperscale and AI data center networks. AOI said proceeds may be used for general corporate purposes including debt repayment, working capital and capital expenditures, with manufacturing expansion for data center optical devices identified as a primary focus. CEO Dr. Thompson Lin said the company plans investments in new production and R&D equipment as it expands advanced manufacturing capacity.

AOI’s manufacturing buildout is already substantial. In July, the company began developing nearly 400,000 additional square feet of manufacturing capacity at two properties in Pearland, Texas, focused on 800G and 1.6T transceivers. Earlier this year, AOI also secured a volume order exceeding $200 million for 1.6T transceivers from a major hyperscale customer. The company has been expanding capacity in both Texas and Taiwan as AI clusters drive higher optical bandwidth requirements.

Net proceeds — $587,999,985.89 after commissions and fees

Program — AOI’s third ATM equity program of 2026

Primary investment — Manufacturing expansion for data center optical devices

Other uses — Debt repayment, working capital, production equipment and R&D equipment

“We intend to use these proceeds to continue to make investments in the business, including new equipment and machinery for production and research and development use, as we continue to scale our advanced manufacturing capacity,” said Dr. Thompson Lin, Founder, President and CEO of AOI.

The significance of the transaction extends beyond the size of the equity raise. AOI is converting strong capital-market access into manufacturing capacity at the same time that its data center portfolio is moving from 400G toward much higher volumes of 800G and 1.6T products.

That relationship between capital and capacity is particularly visible in Texas. AOI began its Pearland expansion in July, adding nearly 400,000 square feet for high-speed transceiver manufacturing. Demand provides the other side of the equation: AOI disclosed in March that it had secured a 1.6T order worth more than $200 million from a long-standing hyperscale customer.

The $588 million infusion therefore gives AOI substantially more financial capacity to execute its manufacturing roadmap. The remaining question is how quickly the company can translate those investments into qualified production capacity and shipments as hyperscalers migrate toward 800G and 1.6T connectivity.

Applied Optoelectronics (AOI) — Company Profile

Leadership — Dr. Thompson Lin — Founder, President & CEO

AI Optics — 400G, 800G and 1.6T optical transceivers; external laser technology and optical components

Recent Milestone — October 2026: Completed $600M ATM program, generating approximately $588M net

Related Converge Digest Coverage — Applied Optoelectronics

SEPTEMBER 30, 2026 · OPTICAL AOI Debuts 25G Tunable DWDM SFP AOI expands its transport-optics portfolio while marking its millionth 1.8 GHz HFC amplifier shipment.

AUGUST 9, 2026 · CORPORATE STRATEGIES AOI’s 800G Ramp Accelerates as U.S. Manufacturing Gains Strategic Weight Q2 analysis examines AOI’s accelerating 800G ramp, capacity constraints and expanding Texas manufacturing footprint.

JULY 14, 2026 · OPTICAL AOI Starts Pearland Factory Buildout for 800G and 1.6T Optics Nearly 400,000 square feet of additional Texas manufacturing capacity targets next-generation data center optics.

APRIL 29, 2026 · CORPORATE STRATEGIES AOI Lands $20.9M Texas Grant to Scale Transceiver Manufacturing Texas Semiconductor Innovation Fund support backs AOI’s domestic high-speed transceiver manufacturing expansion.

MARCH 9, 2026 · OPTICAL AOI Lands $200M Hyperscaler Order for Transceivers AOI’s first major 1.6T volume order established the demand backdrop for its current manufacturing expansion.

Power & SitesUnited States

Constellation, Google strike 890-MW nuclear deal to meet data center power demand

Credited to Construction Dive · constructiondive.com1d ago

Useful

Constellation Energy has signed 20-year power purchase agreements with both Google and Amazon in the last week, supporting almost 1.1 GW of nuclear expansions.

Dive Insight:

The deal with Google is a “direct response” to PJM’s Bring Your Own Power proposal, and aligns with the White House’s ratepayer protection pledge, Constellation said in a statement.

PJM Interconnection is short about 6.8 GW of new capacity, and is struggling to find resources as data center demand rises. The grid operator will delay a planned reliability backstop procurement auction following the Federal Energy Regulatory Commission’s Sept. 29 decision to only partly approve it.

"Preserving and expanding the output of the existing nuclear fleet and developing new clean generation is critical to meeting our nation's growing energy needs," Constellation Chairman, President and CEO Joe Dominguez said in a statement. The deal with Google can “serve as a model for how technology companies and the energy industry can work together... in a way that delivers grid-wide benefits for all, funded by private entities."

The Google-Constellation deal will incorporate operational load-shaping and demand-response capabilities to reduce power consumption during grid stress, the companies said. Across six nuclear sites, the agreement is expected to help sustain roughly 4,400 existing jobs and create approximately 7,200 temporary construction jobs.

Shares of Constellation were up almost 14% in morning trading.

The deal calls for deploying Google Cloud and AI across energy operations, with Constellation building Gemini Enterprise agentic workflows “directly into its core operations,” according to the companies’ announcement. Under an expanded five-year technology agreement, Constellation and Google will utilize AI for site selection, power flow modeling, permitting and interconnection planning, generation optimization and infrastructure security.

“By pairing commercial investments in nuclear uprates with advanced Google technologies, this agreement supports the rapid growth of artificial intelligence and digital infrastructure,” they said.

$165bn Project Jupiter: What Oracle’s force majeure notice means for AI data centre risk

Credited to Capacity Media · capacityglobal.com · 5d ago

Oracle has issued a force majeure notice over Project Jupiter, its flagship Stargate data centre campus in southern New Mexico, preserving the right to defer rent if the site misses its 2028 start because its power supply is not ready.

The notice, first reported by Bloomberg, went to a unit of Blue Owl Capital, which owns developer STACK Infrastructure. Oracle is not seeking to exit as anchor tenant. According to Bloomberg, if both sides accept that a force majeure event tied to power has occurred, Oracle could secure a three-year delay on rent once payments begin. It would still owe other costs in the interim, and the full lease term once rent starts.

Oracle maintains the project is on track. “Project Jupiter remains on our planned schedule,” the company said. Oracle spokesman Michael Egbert described such notices as “commonplace in developments of this scale”.

Flooding then reached the site on 30 September, although Oracle and STACK said in a joint statement that no critical infrastructure was damaged and the schedule is unchanged.

Why did Oracle issue a force majeure notice?

The data centre buildings are under construction. The power to run them is not yet approved.

Project Jupiter is designed to run on a private microgrid of Bloom Energy solid-oxide fuel cells supplying up to 2.45GW. That supply chain has three regulatory links, and none is complete.

The air permit. The New Mexico Environment Department has until 23 November to decide on the microgrid’s air quality permit, according to Source New Mexico. A state Supreme Court stay paused the proceeding in August and was lifted on 17 September. The original hearing officer recused himself in August, and no replacement had been named by late September. At a July scheduling meeting, a lawyer for microgrid developer Yucca Growth Infrastructure said the company stood to lose $325m a month from November without a decision.

The gas supply. Energy Transfer’s Green Chile pipeline, which would fuel the microgrid, still needs Federal Energy Regulatory Commission authorisation. Its start date has slipped by roughly six months to February 2027.

The land. The New Mexico State Land Office cancelled rights-of-way for parts of the pipeline route in March and rejected a request to reconsider in July, saying they were not in the state land trust’s best interests.

Who carries the risk?

In a 14 September statement, Oracle stressed that the campus and the microgrid are separate facilities on adjacent sites, run by separate companies. That structure, increasingly common as hyperscalers turn to on-site generation, spreads delivery risk across contracts that do not automatically move together.

The economics sit in the lease. According to a person familiar with the deal, quoted by Reuters, securing power is Oracle’s responsibility under the contract, Oracle covers the project’s debt costs and it cannot terminate the lease. Blue Owl, with about $3bn of equity in the project, earns a 9% development-stage yield that rises to around 11% once the campus is complete.

Invoking force majeure extends the period of lower development-stage rent. Blue Owl still collects full rent for the planned term, only later. The notice therefore delays the landlord’s return rather than shifting debt onto lenders, and it tests how far force majeure can stretch when the tenant itself holds the power obligation. Markets reacted anyway: Oracle shares fell more than 3% on the day, according to CNBC, and the Financial Times has reported the roughly $18bn construction loan trading at stressed levels.

Bloom Energy chief executive KR Sridhar told Bloomberg TV this week that its units are “fungible” and can be redirected if a project slips. A developer holding a single campus has no such option.

What does this mean for the data centre market?

Force majeure is now a negotiated clause, not boilerplate. Tenants on AI campuses will seek explicit protection against permitting delays on power and fuel. Developers will push for tighter definitions and shorter relief periods.

Behind-the-meter power moves risk rather than removing it. Bypassing the utility avoids interconnection queues, but adds air permits, pipeline approvals and emissions scrutiny, each with its own opponents. It also concentrates exposure to gas supply and prices, a risk Capacity examined after the Middle East supply shock.

Local opposition is now a balance-sheet issue. Permit challenges, land office decisions and state politics now feed directly into rent schedules and the cost of capital. Lenders have already started pricing community opposition into financing terms, and nearly $200bn of US data centre projects are stalled. New Mexico fits a wider US pattern that looks very different in Europe and Asia.

There is a fallback. Oracle executive vice president Mahesh Thiagarajan told Doña Ana County commissioners in late July that if the permit is unavailable, the project would turn to the grid, and Senator Martin Heinrich’s proposed GRID Savings Act would make hyperscale data centres fund their own grid upgrades. Either route adds time.

Dates to watch: the air permit decision by 23 November 2026, FERC authorisation of the Green Chile pipeline, and pipeline commissioning targeted for February 2027.

What is Project Jupiter? A $165bn AI data centre campus near Santa Teresa in Doña Ana County, New Mexico, developed by STACK Infrastructure and BorderPlex Digital Assets with Oracle as tenant. It is one of the flagship Stargate sites built for OpenAI.

What does Oracle’s force majeure notice do? It preserves Oracle’s right to pay lower development-stage rent for up to three years longer if power delays stop the campus opening in 2028. It does not end Oracle’s tenancy.

Is Project Jupiter delayed? Oracle says no. The 2028 target stands, but the microgrid air permit and the gas pipeline it depends on are both still awaiting approval.

Who is affected if Project Jupiter is delayed? Mainly Blue Owl Capital, owner of developer STACK Infrastructure, whose step-up to full rent would be postponed. According to a Reuters source, Oracle covers the project’s debt costs and cannot terminate the lease.

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