Nvidia discusses $250 billion backstop for OpenAI data centre project

Nvidia is in talks to provide a roughly $250 billion financial backstop for OpenAI as part of a planned data centre project in southern Ohio that could become the largest such development ever announced, according to people familiar with the matter speaking to The Wall Street Journal.

The 10-gigawatt facility, being developed by SoftBank’s energy subsidiary, could cost more than $500 billion, including the chips needed to equip the data centres. OpenAI has reportedly been in advanced discussions to lease the site.

Nvidia’s guarantee would help the project raise debt on more favourable terms by strengthening lenders’ confidence in the financing, given that OpenAI is an unprofitable private company without an investment-grade credit rating.

The terms have not been finalised, and the deal could still fall through. The proposed guarantee would cover the data centre lease and construction-related debt, but not the Nvidia chips required for the facility.

Nvidia, which has already invested $30 billion in OpenAI, is also reportedly discussing financing the purchase of chips for the AI company in a deal that could total $350 billion.

The potential arrangements have raised concerns about circular financing in the artificial intelligence industry, particularly if investor sentiment weakens or growth in the sector slows.

By Sabina Mammadli