Nvidia in Talks to Guarantee $250 Billion for OpenAI Data Center
OpenAI Improves Financing Terms With Nvidia Guarantee
Nvidia is reportedly discussing a plan to provide a $250 billion funding guarantee for OpenAI's large-scale data center project.
On July 26 (local time), the Wall Street Journal (WSJ), citing sources, reported that Nvidia is in talks to guarantee the financing needed for OpenAI's data center leasing and construction. The data center in question is a 10-gigawatt (GW) complex under development by an energy subsidiary of SoftBank in southern Ohio, United States.
OpenAI is a loss-making private company and does not hold an investment-grade credit rating. Therefore, if Nvidia provides the guarantee, SoftBank, which is building the data center, would be able to secure funds under more favorable terms. If this deal is finalized, this data center will become the first facility that OpenAI leases and uses directly.
However, the $250 billion guarantee is limited to loans needed for the data center's lease payments and construction and does not include semiconductor purchasing costs. Nvidia is also reportedly considering providing separate financial support of up to $350 billion for OpenAI's semiconductor purchases. The specific terms have not been finalized, and there is a possibility that the deal could fall through.
The total project cost, including semiconductors for the data center, is expected to exceed $500 billion. The authority for allocating electricity to the data center project rests with the U.S. government. Additionally, Japanese funds will be separately invested in the energy business. Recently, Japan agreed to invest approximately $33 billion in a natural gas power plant project in Ohio under a trade agreement with the United States. This power plant will be operated by SoftBank's energy subsidiary.
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Sources stated that U.S. Secretary of Commerce Howard Lutnick is involved in the process of deciding which company will be allocated electricity. OpenAI is reportedly one of the companies showing the greatest interest in the site. Anthropic, Microsoft (MS), and Google have also reportedly spoken with Secretary Lutnick about this matter in recent weeks.
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