Nvidia has revised its financial commitment for OpenAI’s planned Ohio data center, reducing a proposed $250 billion backstop to less than $120 billion, according to The Wall Street Journal. The chipmaker and OpenAI were nearing a deal that could be signed as early as last weekend, with the restructured arrangement covering the initial phase of the buildout—approximately five gigawatts of capacity—while decisions on funding the remaining capacity would be deferred to a later stage.
The Ohio data center, being developed by SB Energy (a SoftBank subsidiary) at the PORTS-Pike Technology Campus, is designed to support up to 10 gigawatts of computing power, with the first phase expected to come online in 2028. Nvidia will provide $1.5 billion in investment to SB Energy and secure exclusive access to AI compute infrastructure at the site, including GPUs, CPUs, networking, and software. OpenAI has agreed to a 20-year lease for the facility, which is projected to create 35,000 construction jobs through 2032 and 2,500 long-term positions.
Nvidia’s Strategic Rationale and Investor Pushback
Nvidia CEO Jensen Huang framed the support as a means to secure long-term infrastructure for its compute products, stating that the company is using "its scale and long-term visibility" to ensure OpenAI can deploy "the most productive AI factories." Huang emphasized that OpenAI will be responsible for lease payments, denying claims of "circular financing." He added that frontier AI labs are "growing faster than their balance sheets and long-term credit profiles can support," necessitating such arrangements.
However, investors raised concerns over Nvidia’s risk exposure, prompting the scaled-back guarantee. The original $250 billion backstop proposal was intended to allow OpenAI to secure cheaper debt financing by providing creditors with greater assurance of repayment. Nvidia’s stock fell 5% after the Journal first reported the discussions. The revised structure limits the guarantee to the initial phase, with additional funding contingent on future decisions.
Infrastructure and Financial Commitments
SB Energy and SoftBank plan to invest at least $4.2 billion in Ohio grid infrastructure to support the data center, including building power sources for 10 gigawatts of energy. Nvidia’s $1.5 billion investment in SB Energy is part of a broader push to tie together chip supply, power generation, and data center development amid soaring AI demand. The project is also backed by Goldman Sachs, which is advising SB Energy, and Morgan Stanley, which is advising Nvidia.
Broader Industry Context and Concerns
The deal reflects a growing trend in the AI industry, where tech firms are increasingly financing the infrastructure required to deploy their products. Nvidia has previously partnered with six major financial institutions, including BlackRock, to launch financing platforms targeting more than $500 billion in third-party funding for AI infrastructure. Critics argue that such arrangements create circular funding flows, where Nvidia’s financial support drives demand for its chips, which in turn fuels further investment.
Land and power constraints remain significant hurdles for data center development in the U.S., with aging grids and community opposition complicating new projects. The Ohio facility is expected to address some of these challenges by securing dedicated power infrastructure, though the scale of the project has raised questions about its long-term sustainability and impact on local resources.
OpenAI’s Funding and Future Plans
OpenAI has stated that it expects to fund its lease commitments through revenue, cash flow, and investor capital. The company is also in discussions to sign a binding lease for the full 10-gigawatt project, which, if completed, would be the largest data center campus announced to date. Analysts note that the project aligns with OpenAI’s broader strategy to expand its compute capacity to meet growing AI workload demands.
Nvidia’s involvement extends beyond financing, with reports suggesting the chipmaker is also exploring a $3 billion investment in SB Energy, half of which would be tied to the company’s planned initial public offering. This investment could raise at least $5 billion for SB Energy, further solidifying the partnership between the companies.