Nvidia (NVDA) shares edged higher in early Monday trading, climbing about 1% to near $227, following the chipmaker's announcement that it will guarantee up to $105 billion in lease payments tied to a massive OpenAI data center project in Ohio. The facility, developed by SoftBank-backed SB Energy, will be built, owned, and operated for OpenAI under a 20-year lease.
Under the agreement, Nvidia will also invest $1.5 billion in SB Energy and secure up to 8 gigawatts of AI computing capacity at the campus. This marks one of Nvidia's largest infrastructure financing commitments to date, underscoring its growing involvement in funding the ecosystem built around its chips.
Strategic Move or Circular Financing?
The deal raises fresh questions about Nvidia's role in financing AI infrastructure, as the company increasingly provides credit support for projects that ultimately purchase its products. Nvidia has previously backed other AI infrastructure firms, including CoreWeave, and has invested directly in OpenAI and Anthropic.
Critics have pointed to potential circular funding flows, where Nvidia helps finance customers that then use those funds to buy Nvidia chips. However, Nvidia rejected this characterization in the Ohio agreement, stating, "OpenAI will pay the lease," and emphasizing that the deal is not an example of circular financing.
Project Details and Timeline
The data center, located in Pike County, Ohio, will initially have 4.25 gigawatts of capacity, with operations expected to begin in phases starting in 2028. Nvidia will exclusively provide AI computing infrastructure at the campus and is offering credit support for land, power, and shell construction tied to the initial capacity. The company also holds an option to secure the remaining 3.75 gigawatts.
SoftBank and SB Energy plan to develop at least 10 gigawatts of new power generation and invest $4.2 billion in regional grid infrastructure through a partnership with AEP Ohio. OpenAI said the project is expected to create about 35,000 construction jobs through 2032 and roughly 2,500 long-term operating jobs.
Nvidia's Expanding AI Financing Role
Nvidia CEO Jensen Huang noted that OpenAI's existing and planned commitments represent about 12 gigawatts of Nvidia compute through 2030, with potential to reach 16 gigawatts if the PORTS-Pike arrangement is expanded. At those levels, Nvidia estimates the opportunity at roughly $600 billion of compute through 2030.
This latest guarantee follows Nvidia's earlier discussions of providing up to $250 billion in lease guarantees for OpenAI, according to media reports. The company's increasing financial backing of AI infrastructure has drawn scrutiny from analysts and regulators concerned about off-balance-sheet financing and the concentration of risk within the AI ecosystem.
Nvidia's move comes as technology companies increasingly link chip supply, power generation, and data center development to accelerate AI infrastructure expansion. The company's leverage in AI funding has become a focal point for investors, especially as Nvidia's Q3 revenue could top $110B according to UBS, driven by the ramp of its Rubin architecture.
While Nvidia's stock remains near record highs, the company's expanding role in financing AI infrastructure could introduce new risks. As chip stocks drag the S&P 500 from record levels, investors are closely watching how these financing arrangements impact Nvidia's balance sheet and long-term growth prospects.
This article is for informational purposes only and does not constitute financial advice.
