Nvidia Lines Up $105 Billion For OpenAI. Here's What it Means For Investors.

Nvidia (NASDAQ:NVDA) said on Monday that it will back as much as $105 billion in financing for a massive OpenAI data center campus in Ohio. The chipmaker will also invest $1.5 billion into SB Energy, the SoftBank unit developing the site.

In return, OpenAI committed to exclusively using Nvidia chips onsite.

Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »

OpenAI's 8-gigawatt data center is massive

OpenAI will lease the site for 20 years, which will eventually grow to provide 8 gigawatts (GW) of compute -- a massive target. That's more than enough energy to power New York City on a typical day. It's also an expensive target; each GW typically costs something like $50 to $60 billion.

The power won't come online all at once, however. The project is planned in phases: roughly 0.8 GW in 2028, growing to 4.25 GW, then the full 8 GW.

How Nvidia's $105 billion guarantee actually works

The $105 billion backstop is not a direct investment, but a guarantee. It means that, in the event OpenAI can't pay its bills, Nvidia will step in to cover any unpaid lease and power obligations. Nvidia owes nothing unless a default actually happens, and the absolute limit the company would be on the hook for is the headline number of $105 billion.