Nvidia offers $250B backstop for OpenAI data center project

Nvidia is in talks to provide roughly $250 billion in financing guarantees for OpenAI's 10-gigawatt data center project in southern Ohio, the Wall Street Journal reported Sunday, citing people familiar with the matter.

The financial backstop would support OpenAI's leasing of the facility being developed by SoftBank's energy subsidiary, the report said, though neither company has publicly confirmed the negotiations.

A 10-gigawatt data center would rank among the largest ever constructed, capable of powering roughly 8 million homes. The $250 billion guarantee — if finalized — would represent one of the largest corporate financing commitments in history, surpassing the combined market capitalization of most S&P 500 companies.

For Nvidia, the deal would lock in multi-year GPU demand from a single mega-project, effectively guaranteeing revenue from the world's most prominent AI developer. For OpenAI, the backstop provides the financial credibility needed to secure construction financing for a project of unprecedented scale.

The negotiations highlight the escalating capital requirements of artificial intelligence infrastructure. OpenAI, the creator of ChatGPT, has been racing to expand its computing capacity to train and deploy increasingly powerful models, while Nvidia has emerged as the dominant supplier of the graphics processors essential for AI workloads. The 10-gigawatt facility would provide enough computing power to train models several orders of magnitude larger than today's frontier systems, which currently require tens of thousands of Nvidia H100 or Blackwell GPUs running for months.

SoftBank's energy subsidiary adds a third major player to the project. The Japanese conglomerate has been expanding its presence in U.S. energy and data center infrastructure, betting that AI's demand for computing power will drive a multi-decade buildout. SoftBank's founder Masayoshi Son has described AI infrastructure as the single largest investment opportunity of his career, committing tens of billions of dollars through the company's Vision Fund and its newly formed energy arm.

The scale of the proposed financing dwarfs typical data center investments. Microsoft, OpenAI's largest corporate backer, has committed roughly $80 billion to AI infrastructure through 2027. Amazon.com Inc. and Google parent Alphabet Inc. have each outlined data center capital expenditure plans exceeding $100 billion over the next several years. A single $250 billion project would eclipse those multi-year programs in one facility.

Nvidia shares have rallied more than 150% over the past year as the company's data center revenue surged past $100 billion annually. The stock trades at approximately 35 times forward earnings, reflecting investor expectations that AI chip demand will remain strong for years. Advanced Micro Devices, Nvidia's primary competitor in AI accelerators, has struggled to gain meaningful market share despite competitive specifications on its MI300X and forthcoming MI400 series chips.

The Ohio project also raises questions about power availability. A 10-gigawatt load would represent roughly 1% of total U.S. electricity generation capacity, requiring dedicated transmission infrastructure and likely drawing scrutiny from grid operators and regulators. Data center power demand in the U.S. is projected to grow from about 4% of total electricity consumption today to as much as 10% by 2030, according to the Electric Power Research Institute.

This article is for informational purposes only and does not constitute investment advice.