Nvidia Guarantees USD 105 Billion for OpenAI Data Center

Nvidia has agreed to provide up to USD 105 billion in financial guarantees for OpenAI’s data center construction project. The guarantee amount, which was initially expected to be as much as USD 250 billion, has been reduced by more than half.

According to a filing with the U.S. Securities and Exchange Commission (SEC) on August 17 (local time), Nvidia will provide a ‘residual value guarantee’ of up to USD 105 billion for a data center complex being developed by SB Energy in Pickaway County, Ohio, where OpenAI is set to lease approximately 4.25 gigawatts (GW) of facilities. If OpenAI fails to pay its rent, Nvidia will compensate for the difference between the minimum guaranteed value of the data center and the amount recouped through re-leasing or selling the facility. In addition, Nvidia will invest USD 1.5 billion in SB Energy, the Japanese SoftBank subsidiary building the data center.

Previously, foreign news outlets reported that Nvidia was considering providing financial guarantees of up to USD 250 billion. Concerns were later raised about Nvidia’s exposure to risk due to the massive scale of the guarantees, and the initial guarantee amount was reportedly reduced to below USD 120 billion before being finally set at a maximum of USD 105 billion.

Some market experts warn that this kind of financial support from Nvidia could lead to ‘circular financing’, creating the illusion of inflated performance for Nvidia and the AI industry as a whole. Since the supported companies could use the funds to repurchase Nvidia AI chips on a large scale, thereby flowing the guaranteed money back into Nvidia’s revenue, there is a perspective that the industry’s real growth may be exaggerated.

In response, Jensen Huang, CEO of Nvidia, stated in a message posted on the company’s website, “No, OpenAI will pay its rent,” adding that “the ability to predict customer demand and thus secure infrastructure for long-term use means proactively acquiring core resources.” He further projected that, including additional expansions of the Ohio data center, Nvidia will have the opportunity to generate approximately USD 600 billion in revenue from sales to OpenAI by 2030.

Meanwhile, on the same day, Nvidia also unveiled detailed plans for the Ohio data center construction. SB Energy and SoftBank will build at least 10 GW of new power generation facilities to support 8 GW of AI computing infrastructure. They will also invest in new regional power grid infrastructure to ensure that local residents are not burdened with increased fees due to the grid’s expansion. At least USD 4.2 billion will be invested in partnership with American Electric Power Ohio (AEP Ohio).

This content was produced with the assistance of AI translation services.