Nvidia Nears Deal To Guarantee About $100 Billion In Financing For Massive Data Center

Nvidia is close to an agreement to provide around $100 billion in credit support for OpenAI to lease a proposed AI data center campus in Ohio that is among the largest projects of its kind, according to four people with knowledge of the talks.

The support would help with financing for the first phase of the project buildout, which will last approximately two years and cover about half the total project, and potentially also support some of the chip purchases, one of those people said. There will then be a second phase of roughly equal magnitude, one of those people said.

The proposed Ohio facility, which sits largely on federally controlled land, would cost roughly $500 billion to develop over an unspecified period of time, based on today’s prices for hardware, labor, power and other materials, The Information reported in June. The project would eventually entail multiple data center buildings requiring a total of 10 gigawatts of power, or 4.5 times the generating capacity of the Hoover Dam.

SB Energy, which is majority-owned by Softbank Group, an OpenAI shareholder, is developing the data centers and power plant for the project.

The Wall Street Journal earlier reported that Nvidia was in talks to provide a roughly $250 billion backstop for OpenAI to cover the lease on the Ohio project and the debt needed to fund its build-out. The money wouldn’t cover chip purchases, although Nvidia was discussing a separate deal to finance those, the article said.

One person with knowledge of the backstop talks told The Information the amount had been scaled back, while another said the deal had been split into two phases but that the size hadn’t changed and that the backstop was never planned to be $250 billion.

Nvidia already has been committing billions of dollars in financial backstops for other data centers housing its chips. Its share price slipped and the risk premium on its debt increased in the wake of the Journal report as investors worried about the size of its financial commitments. The Journal reported Friday that Nvidia revised its plan to less than $120 billion.

Nvidia’s Broader Financing Plans

On Monday, Nvidia touted the investment value of its chips in announcing partnerships with six of Wall Street’s biggest firms to raise $500 billion in independent financing to help customers buy Nvidia chips. Nvidia said it might provide certain financial support for up to 25% of the total financing in some related deals.

That partnership is broader than the Ohio project, but Nvidia is also seeking to limit its total credit exposure for the Ohio buildout to that 25% threshold, according to two of the people familiar with the talks.

Talks on the Ohio project are ongoing and the terms could still change. OpenAI and SB Energy have held talks with potential lenders, said another person involved in the deal.

Nvidia’s support could ease potential investors’ concerns on how OpenAI and SB Energy would finance the project ahead of their respective initial public offerings. SB Energy aims to go public as soon as next month while OpenAI has discussed a possible 2027 offering, according to other people familiar with the talks.

SB Energy would lease the land from the U.S. government for an 80-year term, said a person involved in the discussion. An entity affiliated with SB Energy has rights to purchase the private land adjacent to the federal site but it has not yet done so, according to local filings.

The project sits largely on Department of Energy land. It originated as part of President Trump’s trade agreement with Japan last year and includes around $33 billion in Japanese funding. The Commerce Department, which is running the project along with the Department of Energy, selected SB Energy to spearhead the development and is involved with determining how the final financial structure is determined, according to a person familiar, to ensure profitability for the U.S. government and Japan.

After Japan recoups its original investment, 90% of the revenue will go to the U.S. government and the rest to Japan, according to two people familiar with the arrangement.

Limiting Risk

Even if Nvidia’s guarantee ends up being closer to $100 billion, the guarantee amount would be far more than the existing credit support Nvidia has disclosed.

Nvidia last disclosed $3.5 billion in total lease guarantees for its customers as of the quarter that ended in April, which it provided in exchange for the rights to buy shares in those companies in the future. Nvidia said in July that it would take a cut of some cloud customers’ revenues in exchange for credit support, The Information previously reported. That includes a deal to help Asia-Pacific cloud provider Firmus to purchase 170,000 advanced Nvidia graphics processing units, which could be worth more than $10 billion.

But backstopping any amount generally comes with the expectation that the backstopper will in all likelihood not have to pay much. For example, Google disclosed $44 billion in lease backstops but recorded exposure of only $815 million.