Nvidia Scales Back Guarantee for OpenAI Ohio AI Factory

Nvidia Corporation scaled back its financial guarantee for a massive OpenAI data center project in Pike County, Ohio, reducing the commitment from an initial $250 billion to between $105 billion and $120 billion. The revised guarantee covers the first phase of the project, which includes 4.25 gigawatts of computing capacity. This adjustment follows investor concerns regarding risk exposure and circular financing, as the project's growth directly increases demand for Nvidia GPUs.

Developed by SB Energy, a subsidiary of SoftBank Group, the facility will be built at the PORTS-Pike Technology Campus on land owned by the U.S. Department of Energy. The site is planned to scale up to 10 gigawatts and will include a $33 billion natural gas power plant. To secure its role as the sole compute infrastructure supplier, Nvidia is investing $1.5 billion directly into SB Energy and has partnered with six financial institutions, including BlackRock and Goldman Sachs, to mobilize over $500 billion in third-party capital.

OpenAI will lease the facility, which is expected to create 35,000 construction jobs through 2032 and 2,500 long-term positions. To mitigate local impact, OpenAI committed to a closed-loop air-cooled water system and a $40 million community grant fund. Jensen Huang, CEO of Nvidia, stated that physical infrastructure has become a primary constraint on AI growth, surpassing algorithms and customer demand. He clarified that the arrangement is not circular financing because OpenAI will pay the lease.