Nvidia is in talks to guarantee $250 billion of the financing for OpenAI's Ohio data center, the Wall Street Journal reported on July 26. The project's total cost could reach $500 billion, making it the largest single data center project announced so far. Serenity, an X account tracking chip and AI markets, summarized the report.
SoftBank's energy unit, SB Energy, is developing a 10-gigawatt data center campus in southern Ohio, roughly the output of five or six nuclear reactors combined. OpenAI would sign a long-term lease on the facility, while Nvidia would guarantee $250 billion of the construction financing.
A backstop means that if OpenAI can't repay, Nvidia steps in instead. For banks and bondholders, lending against OpenAI alone, a company that has never turned a profit, is far riskier than lending with the world's largest chipmaker standing behind it. That backing lets far more money get raised at far lower interest rates.
Serenity flagged the same report with a caveat: OpenAI is separately discussing a deal to buy up to $350 billion worth of Nvidia chips. Put together, Nvidia would guarantee $250 billion of OpenAI's debt while trying to sell $350 billion of its own chips into the data center that debt builds. Investor Michael Burry reacted with a short line: "Around and around we go. Nvidia to guarantee $200 billion of ChatGPT's spending on $NVDA chips." He had reportedly just added to his Nvidia short position before posting it.
Nvidia is financing demand for its own products, which makes the revenue growth look weaker than it seems, and leaves Nvidia holding the guarantee if OpenAI stumbles
AI data center demand is large and certain enough that this guarantee is a manageable risk against Nvidia's own cash generation
Tech commentator Ed Zitron went further, calling it "insane on so many levels" and "about as bearish as it gets," and questioned why SoftBank is involved at all and where the actual cash is supposed to come from. None of this is confirmed yet; both companies are still described as being in talks.
Why it matters · Shows how far Nvidia's balance-sheet exposure could stretch as AI data center financing keeps scaling up.
Worth asking · Nvidia guaranteeing the debt that buys its own chips: proof of demand, or a warning sign?