Nvidia Plans $3B SB Energy Bet, Cuts Guarantee to $120B

Nvidia is in talks to invest roughly $3 billion in SB Energy, a SoftBank Group subsidiary developing a large data-center campus in Ohio for OpenAI, The Information reported Saturday, citing people familiar with the discussions.

The chipmaker also plans to provide around $100 billion in credit support for the project. Under the proposed structure, Nvidia would put up half the $3 billion once the Ohio project is signed, the other half as part of SB Energy's planned IPO, which could raise $5 billion as soon as next month.

The Wall Street Journal reported Friday that Nvidia and OpenAI have restructured their financing deal for the campus. Nvidia's initial financial guarantee was cut from the previously discussed $250 billion to less than $120 billion. The move aims to ease investor concerns about Nvidia's balance-sheet exposure as it backs demand for its artificial-intelligence chips. A deal could be signed as soon as this weekend.

Under the revised plan, Nvidia's guarantee covers the first phase, about five gigawatts of power. The chipmaker would decide later whether to fund the remaining capacity. OpenAI is still negotiating a binding lease for 10 GW of the project, which could be signed in the coming days. SB Energy is developing the 10-GW site, which could become the largest data-center project announced to date.

The initial guarantee would cover the data-center lease and the debt needed to build the project, reducing borrowing costs by giving lenders greater confidence in the project's financial backing. Separately, Nvidia is also in talks to finance OpenAI's purchase of chips, which could be worth up to $350 billion for the entire project.

The current talks follow an earlier partnership that stalled. In September, the companies signed a memorandum of understanding for Nvidia to help develop at least 10 GW of computing capacity for OpenAI and invest up to $100 billion. The agreement later hit delays amid concerns raised by several Nvidia officials.

For Nvidia, the restructuring reduces its near-term risk exposure. The $120 billion guarantee is still large – roughly half the company's market capitalization – but it now covers only the first phase, with a clear opt-in for later phases. The $3 billion equity investment is a separate commitment, tied to SB Energy's IPO.

What would confirm the deal is moving forward: a signed lease for 10 GW, the SB Energy IPO filing, and a final agreement between Nvidia and OpenAI. What would weaken the case: a delay in the IPO, a smaller lease than expected, or regulatory pushback on the power supply. The US government controls the power for the project, while Japan is providing separate funding under a recent trade agreement.

Nvidia shares traded at $225.16, down 0.06% on the session. The stock carries an Alpha Score of 79, labeled Strong, reflecting the company's dominant position in AI chips. The Ohio project, if completed, would strengthen Nvidia's relationship with OpenAI and lock in demand for its hardware for years. The risk is that the capital commitment strains the balance sheet if the project scales slower than expected.

The next concrete marker is the SB Energy IPO, which could come as soon as next month. The deal's signing, expected this weekend, will determine whether Nvidia's revised guarantee structure stands.