Nvidia Cuts Proposed OpenAI Data Center Guarantee From $250 Billion to Under $120 Billion

Nvidia is walking back the size of a financial guarantee it planned to offer OpenAI for a massive Ohio data center, cutting the number from roughly $250 billion to less than $120 billion, according to the Wall Street Journal, which cited people familiar with the matter.

The backstop covers lease payments and construction debt for a 10-gigawatt AI computing campus that SoftBank's SB Energy subsidiary is building in Pike County, Ohio, on the site of a decommissioned uranium-enrichment plant. It does not cover the cost of the actual Nvidia chips going into the facility. That's a separate financing conversation reportedly worth up to $350 billion, according to Crypto Briefing.

Do the math and the full project could top $500 billion, a figure CNBC also cited from a person familiar with the discussions.

Why Nvidia got cold feet

Nvidia shares dropped 5% when the Journal first reported the $250 billion figure, according to BigGo Finance. Investors did not like the idea of Nvidia's balance sheet co-signing on debt for one customer's single facility, no matter how important that customer is.

Nvidia is not a bank. It's a chip company with a market valuation built on selling hardware, not on guaranteeing construction loans for data centers it doesn't own. When a company starts backstopping the debt of its biggest customer, shareholders are right to ask what happens if that customer can't pay.

OpenAI's ability to pay is a legitimate question. Reuters, in reporting picked up by both Yahoo Finance and the Lufkin Daily News, noted OpenAI is unprofitable despite a private valuation near $852 billion. CNBC separately reported the company is valued near $1 trillion by private investors. Either way, this is a company burning cash betting its future on staying ahead of Anthropic, Google, Amazon, Meta, and a wave of cheaper open-weight models coming out of China.

The reworked deal

The Journal reported Nvidia and OpenAI are nearing an agreement, with Nvidia's guarantee now limited to just the first phase of the project rather than the whole buildout. A deal could be signed as soon as this weekend, according to the Journal's reporting relayed by Reuters.

OpenAI is still negotiating a binding lease for the full 10-gigawatt campus, separate from the financing structure. None of this is finalized. MarketScreener noted plainly that Reuters "could not immediately verify the report" independently, and both Nvidia and OpenAI declined to comment beyond that.

The bigger financing picture

This didn't happen in a vacuum. Reuters reported that Nvidia partnered with six major financial institutions earlier in the week to launch compute financing platforms aimed at raising more than $500 billion in third-party capital for AI infrastructure. That move looks like Nvidia trying to spread the risk of the AI buildout across Wall Street rather than carrying it alone on its own books.

CNBC's reporting adds useful context that some other coverage skipped over. Nvidia already pledged up to $100 billion to OpenAI last September as part of a strategic partnership tied to at least 10 gigawatts of Nvidia systems deployment. That investment never fully materialized. Nvidia did put $30 billion into OpenAI's record funding round in March. CNBC also quoted Nvidia CEO Jensen Huang saying it "might be the last time" Nvidia invests in OpenAI before the company goes public, a detail that puts the current backstop talks in a different light. Nvidia has already been burned once on a big OpenAI commitment that didn't pan out as promised.

Scale, for context

A 10-gigawatt facility would draw roughly as much power as the entire state of Connecticut, according to Crypto Briefing. CNBC put it differently, citing Energy Information Administration data to say 10 gigawatts is close to the annual power consumption of 8 million U.S. households. The largest data centers running today top out around 1 gigawatt. This project is targeting ten times that, with major operational milestones aimed at 2028.

What's unresolved

The revised terms haven't been publicly confirmed by either company as of this week. The chip financing piece, potentially another $350 billion, is a completely separate negotiation that hasn't been detailed publicly. And OpenAI's confidential IPO filing with the SEC, made back in June, still has no disclosed timeline, meaning the company financing a half-trillion-dollar data center campus remains privately valued and not yet subject to public-market disclosure requirements.

Whether Nvidia's smaller, phase-one-only guarantee is enough to get lenders comfortable financing the rest of the project is the open question hanging over the reported weekend deal deadline.