Nvidia will be the exclusive chip provider for the facility in Pike County, Ohio, which will have a total capacity of as much as 8 gigawatts. OpenAI is leasing the site for 20 years.
Nvidia has agreed to provide a $105 billion guarantee for OpenAI’s datacentre in Ohio, to be developed by Softbank-owned SB energy, marking one of the biggest infrastructure investments by the chipmaker.
The Jensen Huang-led firm said on Monday that it will invest $1.5 billion in SB energy, months after investments by OpenAI and Softbank to expand datacenter infrastructure. This same infrastructure is expected to drive demand for Nvidia chips in the future.
The deal revived allegations of circular funding flows between the chipmaker and its customers as last week the firm came under scrutiny for partnering with six major financing institutions, including BlackRock to launch financing platforms targeting more than $500 billion in third-party funding for AI infrastructure.
Huang denied that the deal was circular financing and said that Nvidia is using its ‘scale and long-term visibility’ to help. “We are securing long-lived infrastructure for Nvidia compute, so OpenAI can deploy the most productive AI factories that can be upgraded repeatedly with each new generation delivering more intelligence and better economics,” Huang said.
The company will be the exclusive chip-provider for the facility in Pike county, Ohio, which will have a total capacity of 8 GW, with 800 MW expected to come online in 2028. OpenAI is leasing the facility for 20 years.
The financing structure is yet not defined but is mostly expected to be equity, including potential funding by a SB energy IPO and Softbank direct investment according to people with knowledge of the matter.
Apart from equity, there will be a debt portion, including project finance loans, and public financing through bonds.
Nvidia said its guarantee covers part of lease and power payments. Additionally, if OpenAI defaults on paying rents, Nvidia will cover the gap between the minimum guaranteed value and whatever the owner can recoup by re-leasing the site.
Nvidia said that it plans to lock up prime sites where its chips can run for multiple generations in the future. Overall, Nvidia plans to generate $600 billion revenue from OpenAI by 2030 by selling 16 GW of computing power, including an expansion of the Ohio site by 3.75 GW.
Land and power are becoming major hurdles in datacentre expansion due to ageing US grid as well as local opposition due to noise pollution and water shortage. However, Ohio has been supportive of datacentre projects because of potential job creation. Moreover, OpenAI and Softbank have committed to invest $80 million in community development projects. The project includes federal land and has involvement of the US departments of Commerce and Energy.
