Nvidia Shakes the Market: Offers $250 Billion Guarantee
The tech giant is in advanced talks to provide a massive financial guarantee for OpenAI, helping it build a major data center in the US and reduce its reliance on competing cloud providers.
Tech giant Nvidia is in advanced talks to provide a financial guarantee of approximately $250 billion to OpenAI, according to a report by the Wall Street Journal citing sources involved in the matter. The planned guarantee is intended to help the developer of ChatGPT lease a massive 10-gigawatt data center campus currently being built in southern Ohio by the energy arm of the Japanese conglomerate SoftBank.
The total cost of the project, including infrastructure construction and the purchase of the chips to be installed in the facilities, is estimated at over $500 billion. The guarantee offered by Nvidia is intended to cover lease agreements and debts related to the construction itself, but it does not include the purchase of the chips that will power the systems. Simultaneously, the two companies are holding separate talks on a financing arrangement for the purchase of the chips themselves, which are valued at approximately $350 billion.
The move is intended to overcome a major hurdle for OpenAI, which does not hold an investment-grade credit rating. Nvidia's intervention is expected to reduce the risk level for lenders and provide them with collateral that will allow the company to obtain more favorable financing terms. For OpenAI, this is a significant step toward independent control of its computing infrastructure, rather than relying on cloud services from companies like Microsoft, Amazon, and Oracle. For Nvidia, the deal ensures stable and sustained demand for its chips for years to come.
The first phase of the massive project in Ohio is expected to provide about 800 megawatts of electricity and be completed in 2028. The power allocation for the site is subject to oversight by the US government and is funded separately by Japan as part of a trade agreement under which Tokyo committed to invest $33 billion in a natural gas-based power plant. US Secretary of Commerce Howard Lutnick is personally involved in decisions regarding energy allocation for the project, with other tech companies such as Google, Microsoft, and Anthropic also competing for access to energy sources at the site.
At this stage, negotiations between the parties are still ongoing, and the final terms of the deal have not yet been formulated. Consequently, there is a chance that the talks will not mature into a binding agreement. However, the very existence of the talks highlights how chip giants are becoming an active and decisive factor in financing the infrastructure projects that drive the global artificial intelligence industry.
