Nvidia And Openai Are in Negotiations to Guarantee $250 Billion in Funding for Data Centers

The Wall Street Journal reported on Sunday that Nvidia (NVDA.O) is in negotiations to give OpenAI funding guarantees totaling around $250 billion as part of a huge data center project.

According to the publication, which cited people knowledgeable with the situation, Nvidia’s backing would enable the ChatGPT manufacturer to lease a 10-gigawatt project that SoftBank’s (9984.T) new tab energy business is creating in southern Ohio.

A deal would ensure demand for Nvidia’s chips for years to come, and for OpenAI, it would be the first step toward managing its own infrastructure rather than renting it from Microsoft (MSFT.O), Amazon (AMZN.O), and Oracle (ORCL.N).

As per the WSJ, the project is anticipated to cost over $500 billion overall, including the processors inside the data center.

The WSJ reported that the chipmaker was also exploring financing OpenAI’s chip acquisitions for up to $350 billion. The $250 billion guarantee would cover the data center lease and debt financing, but it would not cover the Nvidia chips inside the center.

Financing vehicles intended to reassure lenders regarding the project’s funding will be supported by Nvidia’s help. The Journal shares, the project’s initial phase, which would produce about 800 megawatts of power, is anticipated to be completed in 2028.

Under a recent trade agreement linked to Tokyo’s commitment to invest $33 billion in a natural gas plant, the U.S. government controls the electricity and Japan provides separate funding. The report claims that decisions about access are made by U.S. Commerce Secretary Howard Lutnick.

Reuters was unable to confirm the report right away. Requests for comment outside of regular business hours were not answered by Nvidia, OpenAI, or the U.S. Commerce Department.

According to the article, Anthropic, Microsoft, and Google (GOOGL.O) have also spoken to Lutnick in recent weeks, and OpenAI is one of the companies expressing the greatest interest in the project. OpenAI has been in advanced talks to lease the site for several weeks.