Nvidia is in talks to guarantee up to $250 billion for OpenAI's Ohio data center lease, a move that would point to the circular financing fueling the AI buildout. Investors are watching for similar commitments from other hyperscalers.
Nvidia is in discussions to provide a financing guarantee of as much as $250 billion to help OpenAI lease computing from a planned data center in Ohio, a move that would funnel capital into the infrastructure that powers the chipmaker's own business.
The talks, reported by the Wall Street Journal and confirmed by people familiar with the matter, involve a 10-gigawatt hub that SoftBank Group is overseeing. The complex as envisioned would be among the largest in the world, a symbol of the enormous demand for computing to propel AI development.
A guarantee by Nvidia would show the circular financing behind the AI boom – tech giants fund projects that ultimately generate business for themselves. Investors have in recent weeks begun to cool on lofty tech stock valuations, worried that there is more capacity under construction than future AI services will require.
“While Nvidia’s investments and partnerships reinforce confidence in long-term AI buildouts, investors remain concerned about circular financing,” said Gary Tan, a portfolio manager at Allspring Global Investments.
Nvidia is in discussions to help the creator of ChatGPT lease a $500 billion, 10-gigawatt hub that SoftBank's subsidiary SB Energy is developing in Ohio, the people said. The US chipmaker may provide a guarantee of as much as $250 billion to the AI lab, one of the people said. Negotiations are in their early stages and could collapse or financing terms may change, the people said, asking to remain anonymous to describe private talks.
A major financing deal involving Nvidia would help SoftBank borrow more capital for its tentpole Ohio project. The Japanese investment powerhouse intends to join big tech firms in driving trillions of dollars into data center construction and AI development in coming years.
ChatGPT’s developer has been in talks to secure that capacity for weeks, the Wall Street Journal reported earlier. Nvidia is separately discussing financing for OpenAI chip purchases that may total $350 billion, the Journal said, citing people familiar with the matter. Representatives for Nvidia, OpenAI and SoftBank didn’t immediately respond to requests for comment.
Nvidia’s talks to provide a roughly $250 billion financing backstop for an OpenAI data-center lease look constructive for CoreWeave, Crusoe Energy and other neoclouds. The structure suggests Nvidia is prepared to support larger AI infrastructure build-outs, easing concern that capacity demand is fading or that funding markets won’t absorb the next wave of projects.
Alphabet’s capital expenditure increase last week pointed to sustained hyperscaler spending. Similar signals from Microsoft, Amazon and Meta this earnings season would reinforce the view that high-end AI computing remains supply-constrained. Google’s stock page shows an Alphabet (GOOGL) Alpha Score of 70/100, labeled Moderate, with the stock at $319.74, up 0.65% on the session.
Nvidia’s Jensen Huang has directed billions of dollars into companies throughout the AI supply chain. He is aiming to accelerate the uptake of his products and eliminate roadblocks that threaten to slow artificial intelligence adoption. Nvidia is separately investing $1 billion in Naver to help finance an AI data center under construction, and is teaming up with SK Group to build more than 2 gigawatts of AI data centers on the Korean Peninsula.
For Nvidia, closer ties with SK will help improve its access to high-bandwidth memory chips. SK Hynix and Samsung Electronics are the two biggest providers of the crucial components, which are in short supply because of the global build-out of AI data centers.
Huang has argued that investments in companies such as Anthropic and OpenAI will help not only his business but provide an investment return. Critics have expressed concern that such moves represent an artificial inflation of demand.
Nvidia’s NVDA stock page shows an Alpha Score of 75/100, labeled Moderate, with the stock at $206.84, down 0.92% on the session. The talks are still in early stages and could collapse, the people said.
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