Nvidia OpenAI backstop talks target up to $250 billion for Ohio AI site
OpenAI and Nvidia are discussing a credit backstop for a 10-gigawatt Ohio data center campus, CNBC reported.
By Marcus V. Thorne · Markets Editor
· 3 min read
OpenAI and Nvidia are discussing a Nvidia OpenAI backstop of as much as $250 billion to help finance a large artificial intelligence data center lease in Ohio, CNBC reported, citing people familiar with the matter. The proposed support would help OpenAI raise debt for a 10-gigawatt campus in Pike County, a scale that underlines the capital and power demands behind the AI buildout.
CNBC reported that the arrangement under discussion would rely on Nvidia’s credit strength to support financing for the site. One person familiar with the talks said the guarantee would apply to lease obligations and construction debt, while purchases of Nvidia chips are being negotiated separately.
Nvidia declined to comment to CNBC. The Wall Street Journal first reported the negotiations over the potential $250 billion backstop.
What is the Nvidia OpenAI backstop?
A backstop is a form of financial support that can reassure lenders that debt tied to a project has a stronger source of repayment or credit protection behind it. In this case, CNBC reported that OpenAI could use Nvidia’s credit backing to borrow for the Ohio campus, rather than having the guarantee cover the chips that would be installed there.
The discussions remain unfinished and could change, according to another person familiar with the plans cited by CNBC. The structure, size and final financing terms have not been announced by the companies.
The proposed campus is planned for Pike County, Ohio, at a site that once operated as a uranium-enrichment plant, one person told CNBC. SoftBank and SB Energy are developing the campus in partnership with the U.S. Department of Energy, according to CNBC.
The power requirement is central to the project’s scale. CNBC, citing its analysis of Energy Information Administration data, said 10 gigawatts is roughly comparable to the annual electricity use of 8 million U.S. households. One person familiar with the plans said the total cost of the campus could exceed $500 billion.
Why OpenAI needs more data center capacity
OpenAI has been trying to secure more computing capacity since ChatGPT’s 2022 launch accelerated commercial demand for generative AI systems. CNBC reported that the company sees additional infrastructure as necessary to support future demand for its models and services.
The race is taking place against a capital spending surge among major technology companies. CNBC cited competition from Anthropic, Google, Amazon and Meta, which are spending hundreds of billions of dollars on AI infrastructure plans of their own.
Nvidia and OpenAI already have a financial and strategic relationship. Nvidia said in September that it would invest up to $100 billion in OpenAI as part of a partnership under which OpenAI would deploy at least 10 gigawatts of Nvidia systems, CNBC reported. That investment did not materialize, but Nvidia contributed $30 billion to OpenAI’s funding round that closed in March, according to CNBC.
Nvidia Chief Executive Jensen Huang said in March that it “might be the last time” the company invests in OpenAI before an initial public offering, CNBC reported. OpenAI confidentially filed for an IPO with the Securities and Exchange Commission in June, but has not provided an official timetable for a listing.
OpenAI is valued by private investors at nearly $1 trillion, CNBC reported. The company’s business model faces more uncertainty as open-weight AI alternatives, many from China, put pressure on pricing, according to CNBC.
SoftBank is also a major OpenAI investor, CNBC reported. OpenAI and SoftBank announced earlier this year that they planned to invest $1 billion in SB Energy, the company involved in developing the Ohio data center campus.
This story draws on original reporting from CNBC.
