Nvidia agreed to guarantee up to $105 billion to help OpenAI lease a Pike County, Ohio data center built by SoftBank-owned SB Energy, and will separately invest $1.5 billion in SB Energy. The deal extends Nvidia's pattern of financing the infrastructure that runs on its chips, drawing fresh scrutiny of circular funding between the chipmaker and its customers.
Nvidia backs OpenAI's Ohio lease with $105 billion guarantee
Nvidia has agreed to provide a guarantee of up to $105 billion to help OpenAI lease a data center in Ohio being developed by SoftBank-owned SB Energy. The chipmaker will also invest $1.5 billion in SB Energy, months after a $1 billion investment from OpenAI and SoftBank to expand data center infrastructure.
The new deal extends Nvidia's strategy of financing the infrastructure built around its chips, a strategy that helps drive demand but has also raised questions about circular funding flows between the chipmaker and its customers. Last week, scrutiny of such funding deepened after Nvidia partnered with six major financial institutions including BlackRock to launch financing platforms targeting more than $500 billion in third-party funding for AI infrastructure.
Nvidia CEO Jensen Huang said the new deal is not circular financing and that the company is using "its scale and long-term visibility" to help. Nvidia will be the exclusive chip provider for the Pike County, Ohio facility, which will have a total capacity of as much as 8 gigawatts, with the first 800 megawatts expected online in 2028; OpenAI is leasing the site for 20 years.
Financing structure still being worked out
The financing structure is not yet defined and will include equity, people with knowledge of the matter said. That equity may include capital raised by a potential SB Energy IPO and a direct SoftBank investment. Once the total equity amount is set, a debt portion will follow — probably project finance loans and potentially public debt such as bonds, the people said.
Land and power are increasingly becoming a hurdle for data centers because of the aging, strained U.S. grid and growing community opposition tied to higher electricity prices and potential water use. Nvidia said its guarantee covers a portion of the lease and power payments, plus a commitment to ensure the site retains a minimum value — not the full cost of the project or all of OpenAI's obligations. OpenAI will pay the rent, but if it defaults, Nvidia will cover the gap between that guaranteed minimum value and whatever the site's owner can recoup by re-leasing or selling it.
Huang sees up to $200 billion in Nvidia revenue from the site
Huang said the site, which would have an initial capacity of 4.25 gigawatts, could contribute as much as $200 billion to Nvidia's revenue. Overall, Nvidia could make $600 billion in revenue from OpenAI by 2030 by selling it 16 gigawatts of computing power, including an expansion of the Ohio site by 3.75 gigawatts.
To support the site, SoftBank and SB Energy plan to build at least 10 gigawatts of new power generation and invest $4.2 billion in new regional grid infrastructure through a partnership with AEP Ohio. The project is expected to create about 35,000 construction jobs through 2032 and about 2,500 long-term operating jobs, OpenAI said. Sources close to the matter added that the project has a low risk of construction delays from local opposition, since the state has backed it for the jobs it creates and a commitment from OpenAI and SoftBank to fund $80 million in community projects.
Source: Investing.com
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