- Nvidia is in talks to guarantee roughly $250 billion in lease and construction financing for a 10-gigawatt OpenAI data center campus in southern Ohio, first reported by the Wall Street Journal [1] - The total project cost exceeds $500 billion including chips, with Nvidia separately weighing a $350 billion deal to finance OpenAI's GPU purchases [2] - OpenAI lacks an investment-grade credit rating, so Nvidia's balance sheet would effectively stand in as collateral for lenders [3] - Investor Michael Burry increased his Nvidia short position at $210.28, calling the arrangement circular: 'Around and around we go' [4] - The proposed guarantee is nearly six times larger than Google's ~$44 billion in data center rent guarantees, the previous high-water mark for tech infrastructure commitments
[3] Nvidia is in talks to provide approximately $250 billion in financial guarantees that would backstop OpenAI's lease of a massive data center campus in southern Ohio, the Wall Street Journal reported Saturday [1]. The arrangement, if finalized, would represent the largest vendor-financing commitment in technology history.
The 10-gigawatt facility is being developed by SB Energy, SoftBank Group's power subsidiary, on a decommissioned uranium-enrichment site roughly 50 miles south of Columbus. The full project cost — including the AI chips installed inside the data centers — is expected to exceed $500 billion [2]. The first phase, at roughly 800 megawatts, is targeted for completion in 2028
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[3]OpenAI does not carry an investment-grade credit rating, making it difficult to raise the debt needed for a project of this scale on its own terms. Under the proposed structure, Nvidia's balance sheet would effectively serve as collateral, allowing lenders to price the financing against the chipmaker's creditworthiness rather than the borrower's [3]. Discussions remain in early stages and no agreement has been signed
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[1]## The Deal Structure The $250 billion guarantee covers OpenAI's lease obligations and certain construction costs for the Ohio campus, but excludes the cost of chips themselves [2]. In a parallel negotiation, Nvidia is weighing a separate deal to finance up to $350 billion in GPU purchases by OpenAI, which would bring total Nvidia financial exposure to the project to roughly $600 billion
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[3]The campus will likely house next-generation Nvidia hardware rather than current systems. Nvidia's Rubin Ultra architecture, expected in the second half of 2027, delivers roughly 15 exaflops of performance versus 3.5 exaflops for current chips. The subsequent Feynman architecture, slated for 2028, features die stacking and custom HBM memory, with racks hosting up to 1,152 GPUs [2].
SB Energy, which raised $500 million from OpenAI in 2025 and previously built a 900-megawatt solar park near Austin for Google, is planning an initial public offering later in 2026 at a valuation exceeding $50 billion [2]. The Ohio site's power supply is controlled by the U.S. government, with Commerce Secretary Howard Lutnick overseeing access allocation
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[3]## Circular Financing Concerns The proposed arrangement has drawn sharp criticism from investors and analysts who see a structural conflict: a chip supplier underwriting its customer's ability to buy its own products. Michael Burry, the investor famous for his 2008 housing-market short, increased his Nvidia short position on July 24 at $210.28 and posted on X: 'Around and around we go. Nvidia to guarantee $200 billion of ChatGPT's spending on $NVDA chips' [4].
Nvidia's AI-related financial commitments have grown rapidly. The chipmaker has committed over $40 billion to AI equity investments, including roughly $30 billion invested in OpenAI itself. Nvidia has also funded Safe Superintelligence, the startup led by former OpenAI co-founder Ilya Sutskever, which then purchases Nvidia hardware [3].
Tech commentator Ed Zitron characterized the deal as 'such an insane thing to do on so many levels and about as bearish as it gets, especially considering it is being built by SoftBank' [4].
Scale in Context #
The proposed $250 billion guarantee dwarfs existing precedents in tech infrastructure financing. Google has guaranteed approximately $44 billion in data center rent — the current industry high-water mark — making the Nvidia figure nearly six times larger [3].
Big Tech's off-balance-sheet AI commitments have ballooned to an estimated $1.65 trillion in aggregate. Meta alone carries roughly $420 billion in such obligations, nearly triple its reported debt [3]. SoftBank is separately backing a $40 billion OpenAI loan through an eight-bank syndication
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[3]AI infrastructure spending industrywide is expected to exceed $700 billion in 2026, with a cumulative $3 trillion projected through 2028 on data center buildouts [3]. The central risk is that the pace of construction overshoots demand or that returns erode faster than debt can be amortized.
Strategic Rationale #
For OpenAI, the deal represents a step toward controlling its own compute infrastructure rather than renting capacity from Microsoft, Amazon, and Oracle — its current primary cloud providers. Ownership of dedicated facilities would give OpenAI more control over hardware configurations and training schedules [3].
For Nvidia, the guarantee locks in demand for its chips years into the future, though it also concentrates financial risk around a single customer that has never turned an operating profit. Nvidia shares closed Friday at $206.84, down 0.92% [4].
Other AI companies are pursuing similar infrastructure ambitions. Anthropic, Microsoft, and Google have all recently approached Commerce Secretary Lutnick about access to the Ohio site's government-controlled power supply, signaling a broader scramble for energy-rich data center locations [3].
What's Next #
The negotiations remain in early stages, and the terms or structure of any guarantee are subject to change. No timeline for a final agreement has been disclosed [1]. Nvidia is expected to report fiscal Q2 earnings in August, which will give investors their first opportunity to question management about the scope of the company's financing commitments.
The deal's completion would also depend on regulatory and political factors, including allocation of federally controlled power at the Ohio site and a Japanese commitment to invest $33 billion in a natural gas plant to supply additional electricity [3].
Companies mentioned #
Further sources #
[[1] Wall Street Journal report on Nvidia-OpenAI $250B backstop talks (via Yahoo Fin… ↗](https://finance.yahoo.com/technology/ai/articles/nvidia-talks-openai-guarantee-250-233930971.html)
[[2] SiliconANGLE — Nvidia reportedly backstop $250B loan for new OpenAI data center… ↗](https://siliconangle.com/2026/07/27/nvidia-reportedly-backstop-250b-loan-new-openai-data-center-campus/)
[[3] The Next Web — Nvidia in talks to guarantee $250bn of OpenAI data centre debt ↗](https://thenextweb.com/news/nvidia-openai-250-billion-backstop-ohio-data-centre)
[[4] Yahoo Finance — Nvidia reportedly moves to backstop $250B, Michael Burry reacts ↗](https://finance.yahoo.com/technology/ai/articles/nvidia-reportedly-moves-backstop-250-015059079.html)
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