NVIDIA provides USD 100 billion in guarantees for OpenAI's giant data center

OpenAI has signed a 20-year lease for a 10GW AI data center in Ohio, United States, with SB Energy, a subsidiary of SoftBank.

OpenAI signed a 10GW data center lease agreement with SoftBank-owned SB Energy on Monday, with partial support from NVIDIA. Located in Ohio, the United States, the project is expected to become one of the largest artificial intelligence (AI) data center campuses to date.

People familiar with the matter disclosed that NVIDIA will support the project through a commitment to help SB Energy raise debt financing, while avoiding excessive risk exposure for itself.

As part of this arrangement, NVIDIA said it has agreed to invest 1.5 billion US dollars in SB Energy to acquire its equity. SB Energy is controlled by Japan's SoftBank, and OpenAI is also one of its investors. At present, SB Energy is working with banks to prepare for an IPO, which may be listed as early as next month.

Under the agreement, NVIDIA has agreed to provide backstop support for part of the asset value of the data center project after completion, covering the power capacity of about 5GW in the first phase of the project first. In exchange, NVIDIA will become the exclusive chip supplier for the first half of the Ohio campus and take a stake in SB Energy. NVIDIA also has the option to extend its support to the entire 10GW campus in the future.

The 20-year lease signed by OpenAI, part of which was announced on Monday, is the latest in a series of recent complex transactions designed to help AI companies access huge computing power resources.

In recent years, chip companies including NVIDIA and Google have increasingly used their strong balance sheets to support startups such as OpenAI and Anthropic, enabling data center developers to raise debt funds on the basis of lease financing, while helping these chip companies control their own risks.

People familiar with the matter said that the purpose of NVIDIA's support is to make the project easier to obtain financing and reduce financing costs, because it can boost the confidence of lenders: even if OpenAI no longer serves as the tenant of the data center in the future, the data center itself still has high asset value.

NVIDIA's commitment adopts a phased risk mitigation mechanism, and NVIDIA is only required to assume payment obligations after a series of risk mitigation measures are completed.

For example, if OpenAI withdraws from the project, SB Energy first needs to try to lease the data center to other customers at the same rent price. If no suitable new tenant can be found, SB Energy will then try to sell the data center; if the selling price is lower than the project value, NVIDIA will bear the difference. If the first phase of the project is fully completed, the maximum difference that NVIDIA will bear is 105 billion US dollars.

People familiar with the matter said that by backstopping the asset value of the data center rather than the rent paid continuously by OpenAI, this transaction structure has greatly limited NVIDIA's risk exposure. NVIDIA's guarantee only covers completed data centers, not facilities that are still under construction.

The signing of this lease ended weeks of negotiations. People familiar with the matter said that in recent days, OpenAI, SB Energy and NVIDIA have readjusted the scale of the backstop support provided by NVIDIA in response to investors' concerns about NVIDIA's risk exposure.

This article is from the WeChat official account "Sci-Tech Innovation Board Daily", Author: Niu Zhanlin, 36Kr is authorized to distribute this article.