Nvidia cuts OpenAI Ohio data center guarantee to $120 billion

Nvidia has revised its financial commitment to a planned OpenAI data center campus in Ohio, reducing its proposed backstop from $250 billion to less than $120 billion, according to The Wall Street Journal. The chipmaker and OpenAI were nearing a deal that could be signed as early as last weekend, the Journal said.

Investors had pushed back on the scale of Nvidia's financial commitment, worried the company was putting too much of its own balance sheet behind efforts to stimulate demand for its AI chips. The restructured arrangement calls for Nvidia to backstop just the opening phase of the build-out — covering approximately five gigawatts of capacity — with any decision on funding the rest to come at a later stage.

Nvidia stock fell 5% after the Journal first reported the original $250 billion backstop discussions.

The data center campus is being developed by SB Energy, a subsidiary of Japan's SoftBank, on a site in southern Ohio. OpenAI is still in discussions to sign a binding lease for the full 10-gigawatt project, which would be the largest data center campus announced to date if completed. Goldman Sachs is advising SB Energy on the deal and Morgan Stanley is advising Nvidia.

By guaranteeing the lease and the debt financing for construction, Nvidia's commitment would allow the project to borrow more cheaply, since creditors would have greater assurance that the money is there. Nvidia is also discussing a separate arrangement to finance OpenAI's purchase of chips, a figure that could total $350 billion across the full project.