Nvidia is reportedly considering a $250 billion guarantee for OpenAI's Ohio data center. Is this smart infrastructure financing or a circular house of cards?

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Nvidia is in talks to provide roughly $250 billion in financing guarantees to help OpenAI lease a 10-gigawatt data center campus that SoftBank's energy subsidiary SB Energy is developing in Piketon, Ohio, according to the Wall Street Journal. The site is a former federal uranium enrichment facility still being decontaminated. The guarantee would cover the lease and debt financing rather than the chips themselves, with Nvidia separately discussing financing OpenAI's chip purchases for the site worth up to another $350 billion, bringing the total project cost, land, power, chips included, to more than $500 billion. The first phase, roughly 800 megawatts, is expected online in 2028, and powering the full campus requires 9.2 gigawatts of new natural gas generation plus $4.2 billion of transmission work, funded partly through $33.3 billion Japan committed under a trade agreement with the US

The deal would mark OpenAI's first move toward controlling its own infrastructure rather than leasing capacity from Microsoft, Amazon and Oracle as it has done so far, and for Nvidia it locks in chip demand for years. The backing matters specifically because OpenAI still lacks an investment-grade credit rating despite an $852 billion private valuation and 900 million weekly active ChatGPT users, so Nvidia's balance sheet lets SB Energy raise construction debt on far better terms than OpenAI's own credit could support alone. Nvidia has already put $30 billion directly into OpenAI, which has raised its own projected compute spending through 2030 to roughly $750 billion, up from about $600 billion just months earlier

The arrangement has drawn real skepticism specifically around circularity, Nvidia investing in OpenAI, which spends that money buying Nvidia chips, while Nvidia's own current assets sit around $125 billion, roughly half of the guarantee being discussed, raising questions about whether the exposure is genuinely manageable or whether it depends on private valuations that keep climbing partly because of the spending Nvidia itself is financing. Terms haven't been finalized and the deal could still collapse entirely, but if completed it would rank among the largest financing arrangements in the history of the AI industry, and shares of AI infrastructure providers CoreWeave and Nebius both jumped on the news, suggesting markets are reading this as a bullish signal for the sector rather than a red flag

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