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Nvidia to provide up to $105 billion in guarantees for OpenAI's Ohio data center
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NVIDIA announced on Monday that it has agreed to provide up to $105 billion (approximately 708.6 billion yuan) in guarantees for a large data center that OpenAI has leased in Ohio, USA. The data center is being developed by SB Energy, a SoftBank subsidiary, marking one of NVIDIA's largest infrastructure financing commitments to date. Additionally, NVIDIA will invest $1.5 billion in SB Energy, further deepening the tripartite cooperation.
The data center is located in Pike County, Ohio, with a total computing capacity of up to 8 gigawatts (GW), of which the first phase of 800 megawatts (MW) is expected to be operational in 2028. OpenAI plans to lease the facility for 20 years, with NVIDIA serving as the exclusive chip supplier. Jensen Huang stated that NVIDIA is leveraging its scale and long-term visibility to secure resources, deploying the most productive AI factories for OpenAI, and gaining greater intelligence and economic benefits as new generations of technology are upgraded.
The deal has raised concerns about "circular financing." Last week, NVIDIA partnered with six financial institutions, including BlackRock, to launch an AI infrastructure financing platform aimed at leveraging over $500 billion in third-party funds. Huang denied that this transaction constitutes circular financing, emphasizing that NVIDIA is not bearing the entire cost but rather providing guarantees for partial lease and electricity fees, while ensuring the project maintains a minimum value.
According to insiders, the financing structure for the transaction has not yet been finalized, and it will include equity financing, possibly involving funds raised from a future IPO of SB Energy as well as direct investment from SoftBank. Debt financing will then be introduced, including project finance loans and public market instruments such as bonds. NVIDIA stated that its guarantee covers only a portion of the lease and electricity costs; if OpenAI defaults, NVIDIA would be responsible for the difference between the minimum guaranteed value and the proceeds from re-leasing or selling the facility.
Huang said the data center will initially have a computing capacity of 4.25 GW and could eventually contribute up to $200 billion in revenue to NVIDIA. By 2030, NVIDIA could generate $600 billion in revenue by selling a total of 16 GW of computing capacity to OpenAI, including expanding the Ohio data center by an additional 3.75 GW. For reference, 1 GW of electricity can power approximately 750,000 American households on average.
To support the project, SoftBank and SB Energy plan to build at least 10 GW of new power generation facilities, and are investing $4.2 billion in partnership with AEP Ohio to build regional grid infrastructure. OpenAI stated that the project is expected to create approximately 35,000 construction jobs by 2032 and around 2,500 long-term operational jobs. Due to local government support, the risk of project delays from community opposition is low, and OpenAI and SoftBank have also committed $80 million for community projects.
Danni Hewson, head of financial analysis at AJ Bell, said that investors' concerns about an endless cycle of AI deals are justified, but the number of participants in the field is limited, making some degree of circular financing inevitable. The biggest test is whether these investments will yield substantial returns, which will take time to verify. The project also involves federal land and has participation from the U.S. Department of Commerce and the Department of Energy, highlighting the increasingly intense competition for land and power resources in AI infrastructure.
