Nvidia has guaranteed up to $105 billion of OpenAI's data center leases in Ohio, a residual value guarantee disclosed in a filing dated Aug. 17. The company pays only if OpenAI defaults, and OpenAI must reimburse anything Nvidia actually disburses.
What the filing covers
The document dated Aug. 17 details residual value guarantees backing OpenAI's data center leases at PORTS-Pike, a campus in Pike County, Ohio. SB Energy, an energy and data center developer backed by SoftBank Group, OpenAI and now Nvidia, is building the site and will own and lease it to OpenAI for 20 years. Nvidia is investing $1.5 billion in SB Energy as part of the arrangement.
The campus is expected to reach 8 gigawatts of compute load, and Nvidia's guarantees cover the leases for the first 4.25 gigawatts, with an option to back the rest. In exchange, the site exclusively hosts Nvidia's full-stack AI factory platform, from GPUs to networking equipment.
When Nvidia would actually pay
Nvidia owes money in only two scenarios: OpenAI becomes insolvent and defaults on a lease, or OpenAI stops paying rent. Even then, Nvidia would owe only the difference between a lease's minimum guaranteed value and what SB Energy recovers by releasing or selling the space, and OpenAI has agreed to reimburse Nvidia every dollar it actually pays out.
Each guarantee ends on the 20th anniversary of its lease, when OpenAI exercises a valid early termination, or once OpenAI achieves a satisfactory credit rating. The obligations don't take effect until the site's commissioning dates begin in 2028.
Not a reversal of Huang's March comments
In March, Nvidia CEO Jensen Huang said at an investor conference that the company's $30 billion investment in OpenAI "might be the last time" it puts money into the AI start-up, explaining that OpenAI going public would likely close the window for further share purchases. That $30 billion came as part of the $122 billion funding round OpenAI completed earlier this year. The new guarantee doesn't contradict that: it backs credit rather than buying shares, delivers no cash today and dilutes no shareholders.
The numbers behind the commitment
Nvidia had $50.3 billion in cash and marketable debt securities at the close of its fiscal 2027 first quarter, which ended April 26, plus $30.2 billion in marketable equity securities. The $105 billion cap exceeds both combined. But Nvidia's fiscal first-quarter revenue totaled $81.6 billion, up 85% year over year and 20% from the prior quarter, with operating income of $53.5 billion. Revenue guidance for the fiscal second-quarter report, due Wednesday and the first since the filing, sits at $91 billion.
Source: The Motley Fool
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