Nvidia to provide up to $105 billion guarantee for OpenAI's Ohio data center

Nvidia has pledged to provide up to $105 billion in guarantee to assist OpenAI in leasing a massive data center in Ohio, a project being developed by SB Energy, a subsidiary of SoftBank. This represents one of Nvidia's largest infrastructure financing commitments. In addition, Nvidia is investing $1.5 billion in SB Energy. This investment follows a $1 billion investment from OpenAI and SoftBank to expand the data center infrastructure.

The new deal underscores the trend of Nvidia financing the infrastructure around its chips, a strategy that fuels demand but also raises questions about potential circular funding flows.

OpenAI will lease the site for 20 years, and the facility is expected to have a capacity of up to 8 gigawatts, with the first 800 megawatts slated to come online in 2028. Nvidia will be the exclusive chip provider for the facility, which is located in Pike County, Ohio. The financing structure will include equity, which may come from a potential SB Energy IPO and direct investment from SoftBank, as well as a debt component, likely including project finance loans and possibly public debt such as bonds.

Despite concerns about circular financing, Nvidia assures that the deal is not circular, and Nvidia will ensure the site retains a minimum value. The project has been supported by the U.S. Departments of Commerce and Energy, and has the backing of local communities due to job creation and funding of community projects.