Nvidia offers a guarantee of up to $105 billion for the OpenAI data center in Ohio

Nvidia has agreed to provide a guarantee worth up to $105 billion to help OpenAI lease a massive data center in Ohio, being developed by SoftBank subsidiary SB Energy, in one of the chip company's largest commitments to infrastructure financing. The Jensen Huang-led company said Monday it will also invest $1.5 billion in SB Energy, months after a $1 billion investment from OpenAI and Soft.

A bank to expand data center infrastructure. The new deal is the latest example of Nvidia financing the infrastructure that relies on its chips, a strategy that helps boost demand for the company's products, but has also raised questions about circular financing flows between the chip giant and its customers. Scrutiny of this type of financing increased last week, after Nvidia entered into a partnership with six major financial institutions, including BlackRock.

To launch financing platforms targeting providing more than $500 billion in external financing for artificial intelligence infrastructure. The new deal does not represent revolving financing, Huang said, adding that Nvidia is leveraging its "scale and long-term vision" to help with this project. “We are securing long-term NVIDIA compute infrastructure so that OpenAI can deploy more productive AI factories that can be upgraded repeatedly,” Huang said.

With each new generation, providing greater intelligence and better economics.” Nvidia will be the exclusive chip supplier at the facility in Pike County, Ohio, which will have a total capacity of 8 gigawatts, with the first 800 megawatts expected to enter service in 2028. OpenAI will lease the site for 20 years.

The US power grid is aging and under increasing pressure, as well as growing community opposition to new construction projects due to concerns about rising electricity prices and potential water waste. Nvidia said its guarantee would cover part of the rent and energy payments, along with a commitment to ensure the site retains a minimum value, but not the full cost of the project or all of OpenAI's liabilities. OpenAI will pay the rent, but if you are unable to...

To pay, Nvidia will cover the difference between the minimum guaranteed value and what the site owner can recover by re-renting or selling it. Nvidia said it intends to selectively secure key locations where its chips can run across multiple generations in the future. Dani Hewson, head of financial analysis at AG Bell, said: “Investors are right to be concerned about what seems like a never-ending cycle of AI deals, but in reality, the number of parties...

The player in this area is not large, and it was natural that there would be some degree of circular financing.” She added: “The biggest test is whether these investments will ultimately generate good returns for all who put in the money, and that is something that will only become clear later.” Huang said that the site, which will have an initial capacity of 4.25 gigawatts, could contribute up to $200 billion to Nvidia’s revenues. One gigawatt of computing power is enough

To provide electricity to about 750,000 American homes on average. Overall, Nvidia could generate $600 billion in revenue from OpenAI by 2030 by selling 16 gigawatts of compute capacity, including a 3.75 gigawatt expansion of the Ohio site. To support the site, SoftBank and SB Energy plan to build at least 10 gigawatts of new electricity generation capacity, and invest $4.2 billion in power grid infrastructure.

The new regional, through a partnership with AEP Ohio. The project is expected to create about 35,000 jobs in the construction sector until 2032, along with about 2,500 long-term operational jobs, according to OpenAI, the developer of ChatGPT.

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