Nvidia will supply the credit and compute behind a new OpenAI data center in Ohio, backing an initial 4.25 gigawatts of capacity with an option for 3.75 gigawatts more. SB Energy will build and run the site under a 20-year lease to OpenAI, with Nvidia's guarantee on the deal capped at $105 billion.
Nvidia said Monday it will provide the credit and compute for a new OpenAI data center in Ohio, extending its run of financing deals for the AI buildout. SB Energy will build and manage the site at the PORTS-Pike Technology Campus in Pike City under a 20-year lease to OpenAI.
Capacity comes online in 2028
The credit backs an initial 4.25 gigawatts of computing capacity, with the option for an additional 3.75 gigawatts, and capacity is expected online in phases starting in 2028. As part of the agreement, SB Energy and SoftBank will build power sources supporting 10 gigawatts of energy and invest at least $4.2 billion in grid infrastructure for the region, while Nvidia will invest $1.5 billion in SB Energy.
OpenAI has a stake in SB Energy, and OpenAI CEO Sam Altman was an early investor in the company. According to a Nvidia SEC filing, the company's aggregate payment obligation under the lease agreement is capped at $105 billion for its initial commitment.
Huang pushes back on circular-financing concerns
The deal follows CNBC's earlier report that Nvidia was in talks to provide a backstop of up to $250 billion for a 10-gigawatt data center at the same Ohio location, before the Wall Street Journal reported Nvidia was set to cut that guarantee to less than $120 billion.
Scrutiny over circular financing in the AI trade has followed, since Nvidia last week also lined up $500 billion in financing for customers to buy its hardware for data center projects. Addressing the concern on X, Nvidia CEO Jensen Huang said "NVIDIA compute is versatile, fungible and broadly adopted." He added that if OpenAI does not take up the lease, Nvidia could resell the capacity to other qualified tenants.
Nvidia holds its base ahead of earnings
Nvidia held its ground within a base on Monday following the news. The company sits on a market cap of $5.3 trillion as the most valuable company on the market. OpenAI, for its part, has committed to deploying Nvidia's AI infrastructure to the tune of $600 billion through 2030.
The chipmaker is scheduled to report second-quarter earnings on Aug. 26, with Wall Street targeting earnings of $2.08 per share and $92 billion in sales.
Sources: CNBC, Investor's Business Daily, CoinGape
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