The long-anticipated data center deal between OpenAI and Nvidia has been finalized at a significantly lower figure than initially reported. According to SEC filings, Nvidia is guaranteeing up to $105 billion for the planned campus in Pike County, Ohio—a $145 billion drop from the $250 billion guarantee previously under consideration.
The Shadow of Circular Financing
The reduction reflects a recurring concern within the AI ecosystem regarding "circular financing." This model involves the world's dominant chipmaker providing the financial backing for the very infrastructure that generates demand for its own hardware. Investors have signaled anxiety over the sustainability of this cycle, with Nvidia shares previously dropping 4.5% on news of the initial, larger guarantee.
Infrastructure and Power Requirements
The Ohio project, situated at a former U.S. Department of Energy uranium-enrichment site, is being developed by SB Energy (backed by SoftBank). Nvidia’s role includes a $1.5 billion investment in SB Energy to help secure financing for lease and power payments.
- The campus aims for a total capacity of 8 gigawatts.
- The initial 800 megawatts are expected to be online by 2028.
- OpenAI will lease the facility for up to 20 years, with Nvidia serving as the exclusive chip provider for the first phase.
Nvidia CEO Jensen Huang has disputed the circular financing narrative. He emphasized that the partnership is focused on securing "long-lived infrastructure" to allow OpenAI to deploy advanced AI factories that can be upgraded across multiple generations of hardware.
Regulatory Tailwinds
The deal's structure was partly facilitated by recent SEC guidance. In July, staff concluded that certain data-center debt falls outside specific Dodd-Frank risk-retention rules, making it easier for companies like Nvidia to mobilize third-party capital rather than carrying the full financial exposure on their own balance sheets.
