# What a Tangled Web: OpenAI Is Becoming Too Interconnected to Fail > Source: > Published: 2026-07-29 11:21:07+00:00 TL;DR — Key Takeaways **NVIDIA may help guarantee the debt used to buy NVIDIA equipment.** That creates a circular system in which supplier financing supports customer purchases and boosts the supplier’s own revenue.**OpenAI’s suppliers are becoming its bankers.** NVIDIA, Oracle and SoftBank are increasingly using their capital, credit and balance sheets to support OpenAI’s infrastructure expansion.**Real AI demand can still be overfinanced.** The infrastructure may prove essential, but vendor-backed spending makes it harder to distinguish organic demand from expansion sustained by suppliers.**More compute could undermine the economics funding it.** Greater capacity makes AI tokens cheaper and more abundant, potentially squeezing model pricing, hardware margins and infrastructure returns.**OpenAI is becoming too interconnected to fail.** Its collapse could damage chip sales, cloud commitments, investments, infrastructure debt and government industrial policy simultaneously. “Oh, what a tangled web we weave, when first we practice to deceive.” Sir Walter Scott probably did not have AI data-center financing in mind when he wrote that line. To be clear, I am not accusing NVIDIA, OpenAI, Oracle, SoftBank or anyone in the United States or Japanese governments of fraud or deliberate deception. But tangled? This web is becoming almost impossible to follow. The complexity of these deals makes it increasingly difficult to answer some very basic questions. Where is the real demand? Who is providing the money? Whose balance sheet supports the borrowing? Who books the resulting revenue? And who gets stuck with the bill if OpenAI cannot generate enough cash to honor all the promises being made on its behalf? According to [The Wall Street Journal](https://www.wsj.com/tech/ai/nvidia-in-talks-with-openai-to-guarantee-250-billion-financing-for-data-center-3dd6eae3), NVIDIA is discussing a guarantee that could support roughly $250 billion in financing for a proposed OpenAI data-center development in southern Ohio. The 10-gigawatt campus, being developed by SoftBank-controlled SB Energy, could reportedly require more than $500 billion to complete. Because OpenAI does not have an investment-grade credit rating, NVIDIA’s guarantee could wrap the project in NVIDIA’s considerably stronger credit and allow it to borrow at more favorable rates. NVIDIA may also help finance as much as $350 billion worth of computing systems for the campus. Let that sink in. NVIDIA would help guarantee the debt that allows OpenAI to fill data centers with NVIDIA equipment. The purchases become NVIDIA revenue. That revenue strengthens NVIDIA’s balance sheet and market value, which give NVIDIA the financial capacity to support still more OpenAI construction and still more NVIDIA purchases. NVIDIA is no longer merely selling shovels during the AI gold rush. It is considering guaranteeing the mortgage on the mine so the miner can keep buying NVIDIA shovels. That does not mean the demand for AI is fake. AI usage is growing rapidly. The infrastructure is real, the applications are multiplying and we are going to need dramatically more computing capacity than exists today. But vendor-enabled demand is not necessarily the same thing as independently financed, economically proven demand. An infrastructure buildout can be necessary, transformative and wildly overfinanced at the same time. History has shown us that more than once. ### OpenAI’s Suppliers are Becoming its Bankers NVIDIA would not be the first OpenAI supplier to lend the company its financial strength. Oracle has already done a version of it. OpenAI reportedly committed to purchase approximately $300 billion in Oracle computing capacity over five years beginning in 2027. Oracle and the developers building the underlying data centers can then borrow against long-term Oracle leases and purchase commitments because lenders are relying on Oracle’s investment-grade creditworthiness. OpenAI may be the ultimate consumer of much of the capacity, but Oracle becomes the stronger counterparty that makes financing possible. The problem is that even Wall Street has limits. Banks reportedly struggled to distribute billions of dollars of loans for Oracle-leased data centers in Texas and Wisconsin because financial institutions were approaching their exposure limits for a single counterparty. The sheer amount of Oracle-related debt began clogging bank balance sheets and constraining financing for additional OpenAI projects, according to [the Journal](https://www.wsj.com/tech/ai/oracle-ai-demand-debt-04977749). Oracle has not publicly offered the same explicit $250 billion guarantee NVIDIA is reportedly considering. The legal structures are different. Economically, however, the family resemblance is unmistakable. Oracle is underwriting OpenAI as its cloud vendor. NVIDIA may underwrite OpenAI as its chip vendor. SoftBank is underwriting OpenAI as an investor, infrastructure partner and project developer. OpenAI’s suppliers are gradually becoming its bankers. That should cause us to ask a question that investors learned to ask during the telecom and fiber boom: What does it mean when the companies benefiting most from a customer’s purchases must help that customer afford to continue purchasing? Equipment companies such as Lucent and Nortel extended financing to telecom carriers that used the money to buy their equipment. The vendors booked revenue. The networks were built. Each new construction announcement was presented as additional evidence of inexhaustible demand. The fiber was not imaginary. It became essential infrastructure that still carries enormous amounts of the world’s traffic. The mistake was assuming that necessary infrastructure automatically produced sufficient utilization, pricing power and profitable demand to support every company and every financial arrangement assembled around it. I am not predicting NVIDIA will become another Nortel or that the AI buildout is about to collapse. I am saying vendor financing is a historical warning light. Once suppliers must finance their customers, it becomes much harder to distinguish organic demand from expansion sustained by the suppliers’ own balance sheets. ### The Tokenomics Trap There is another contradiction buried inside this spending spree. Every additional gigawatt of data-center capacity becomes another enormous token factory. More computing capacity should make tokens more abundant and drive down the marginal cost of intelligence. That is good for adoption. It is good for developers, enterprises and consumers. It may be one of the most important economic developments of our lifetime. It is not necessarily good for companies investing hundreds of billions of dollars based on the assumption that intelligence will remain scarce enough, expensive enough and profitable enough to pay for all this infrastructure. NVIDIA may be protecting today’s hardware revenue by financing more construction while accelerating the abundance that eventually places pressure on hardware margins, model prices and token economics. That is the central dynamic in my forthcoming book, The Indispensability Trap. Infrastructure becomes increasingly essential to society at precisely the moment that abundance, competition, regulation and public dependence begin squeezing the exceptional profits that financed its construction. The railroads became indispensable. So did electricity, telephony, fiber and cloud computing. Indispensability did not preserve unlimited profits. It brought commoditization, consolidation, public scrutiny and, in some cases, government intervention. AI will not be exempt from that pattern simply because its numbers are larger. ### When Communities Say No, Find Federal Land The tangled web surrounding the Ohio project extends far beyond corporate finance. The proposed campus would be built on [Department of Energy](https://www.energy.gov/articles/fact-sheet-department-energy-ensuring-affordable-energy-access-ohio-while-powering-future) land at the former Portsmouth Gaseous Diffusion Plant in Pike County, where uranium was once enriched for America’s nuclear weapons program. The federal government is presenting the project as a combination of site remediation, American energy expansion, industrial policy, national security and leadership in the global AI race. According to the Department of Energy, SB Energy plans to develop 10 gigawatts of new power generation, including at least 9.2 gigawatts of natural-gas generation, to support 10 gigawatts of data-center capacity. SB Energy and AEP Ohio are also planning approximately $4.2 billion in transmission infrastructure. There are important commitments here that should not be ignored. SB Energy says it will pay for the transmission construction, make excess capacity available to the grid, help accelerate remediation of the former nuclear site and fund a $40 million community-benefits agreement. The government says the project’s dedicated rate structure will protect ordinary Ohio ratepayers from having to subsidize its electricity infrastructure. Those are meaningful promises. We should watch closely to see whether they are kept. But the use of federal land is no footnote. Communities around the country are pushing back against data centers over power prices, water consumption, noise, pollution, land use and public subsidies. Local residents are discovering that they possess leverage through zoning hearings, building approvals and elected officials. The Ohio project offers another route. Putting the largest proposed data-center campus in the country on federal land does not eliminate environmental review, state regulation or local participation. It does, however, alter the balance of power. A private data center ordinarily comes before a community asking for permission. A federally backed project located on Department of Energy land arrives wrapped in environmental remediation, energy security, international trade and the imperative to win the AI race. When communities began saying no to data centers, the answer may not have been to persuade them. It may have been to find federal land where their ability to say no carries considerably less weight. The government is no longer merely setting the rules for the AI buildout. It is contributing land, energy policy, diplomatic capital and political insulation. ### SoftBank and the Japanese Connection Then there is SoftBank. SoftBank is a major OpenAI investor and one of the central parties behind Stargate. Its SB Energy subsidiary is leading the Ohio development. OpenAI and SoftBank have both invested in SB Energy, while SoftBank’s broader financial interests depend heavily on OpenAI’s continued expansion. Japan is also expected to provide approximately $33.3 billion for the project’s natural-gas generation under the U.S.-Japan Strategic Trade and Investment Agreement. Consider what this produces. OpenAI supplies the projected demand. NVIDIA may supply the chips, equipment financing and credit guarantee. Oracle supplies additional computing capacity and its investment-grade balance sheet. SoftBank supplies investment capital, project management and an energy-development company. Japan finances much of the new power generation. The United States supplies federal land and the national-security rationale. Utilities and Wall Street supply transmission infrastructure and project debt. This is not a supply chain. It is a financial circulatory system. And almost every artery leads back to OpenAI. If the project succeeds, everyone gets a victory. NVIDIA books enormous sales. OpenAI gains the capacity it wants. SoftBank earns investment returns. Oracle fills its cloud. Japan strengthens its influence in the AI supply chain. Washington declares progress in the race against China. Ohio gets construction, employment and a remediated federal site. If it fails, responsibility will be dispersed so broadly that no single party appears to own the whole failure. That dispersion may make the structure safer for each participant at the beginning. It could also make the entire system much harder to allow to fail at the end. ### From Too Big to Too Tangled A $250 billion guarantee is not the same as NVIDIA writing a $250 billion check. Its actual exposure would depend on the final terms, how much financing is drawn, construction milestones, collateral values and whatever protections NVIDIA negotiates. NVIDIA is also one of the largest and most profitable companies in the world. It can withstand losses that would destroy almost any other business. But an OpenAI-related credit loss would not occur in isolation. For NVIDIA to sustain a major loss under such a guarantee, OpenAI would probably have to be in severe financial distress. That same distress could reduce NVIDIA equipment orders, impair NVIDIA’s investment in OpenAI, undermine Oracle’s cloud commitments, damage SoftBank’s portfolio, strand partly completed data centers and trigger a broader repricing of AI infrastructure debt. NVIDIA could probably survive a very large OpenAI loss. The AI market might not survive what would have to happen for that loss to materialize. That is how “too big to fail” becomes “too tangled to fail.” OpenAI’s protection would not come from the strength of its own balance sheet. It would come from the damage its failure would inflict on everyone woven around it. OpenAI is becoming a load-bearing customer for NVIDIA, Oracle, SoftBank, data-center developers, utilities, project-finance lenders, Japanese investment policy, American industrial policy and the credibility of Stargate. Its collapse would no longer resemble an ordinary failure by an unprofitable technology company. It could undermine the revenue projections, investments and political commitments of some of the most powerful corporations and governments in the world. This does not require a secret plan to produce a bailout. Every participant can make a rational decision based on its own interests. NVIDIA wants chip revenue. Oracle wants cloud growth. SoftBank wants investment returns. Japan wants strategic influence. Washington wants AI supremacy. The result of those individually rational decisions can still be a system that no one can safely unwind. That is the Indispensability Trap in financial and political form. OpenAI does not merely intend to supply an indispensable intelligence layer. It is becoming indispensable as the economic justification for the infrastructure being built to create that layer. Return, then, to Walter Scott’s tangled web. The potential deception may not be a hidden conspiracy. It may be the story the AI industry tells itself: that every investment, purchase commitment and construction project represents independent proof of demand, even when those commitments increasingly finance, guarantee and validate one another. NVIDIA is not considering this guarantee because OpenAI is too financially strong to fail. It may be considering it because too much of the AI boom now depends on OpenAI to let it fail. OpenAI is not becoming too big to fail. It is becoming too interconnected to fail. Once NVIDIA, Oracle, SoftBank, Wall Street, Japan and the United States finish weaving themselves around the company, rescuing OpenAI may look considerably cheaper than allowing the whole web to unravel.