OpenAI and Nvidia in Talks for $250 Billion Backstop to Fund Mega Data Center

OpenAI is in discussions with Nvidia about a financial backstop worth up to $250 billion to help fund an enormous artificial intelligence data center in Ohio, according to a person familiar with the matter. The guarantee would allow OpenAI to raise debt for the 10-gigawatt campus in Pike County, leveraging Nvidia's credit strength to cover lease and construction costs. The deal does not include the Nvidia chips that would power the facility, which are being negotiated separately.

The massive site, once a uranium-enrichment plant, could ultimately cost more than $500 billion to build. A 10-gigawatt data center consumes roughly as much electricity as 8 million U.S. homes annually. SoftBank and SB Energy are developing the project in partnership with the U.S. Department of Energy, and SoftBank - a major OpenAI investor - has already committed $1 billion to SB Energy. The talks are ongoing and subject to change, according to a second source.

OpenAI launched the AI boom with ChatGPT in 2022 and has been racing to secure computing power as it faces intense competition from Anthropic, Google, Amazon, and Meta, which are collectively spending hundreds of billions on their own AI infrastructure. In September, Nvidia pledged up to $100 billion in OpenAI, but that investment never materialized. Nvidia did contribute $30 billion to OpenAI's record funding round in March. CEO Jensen Huang later suggested that might be the last such investment before OpenAI goes public. The company confidentially filed for an IPO in June and is now valued at nearly $1 trillion by private investors, though open-weight AI models from China threaten to undercut its pricing power.

Source: CNBC