Nvidia is in talks to provide a $250 billion lease guarantee for the giant data center planned by artificial intelligence company OpenAI in Ohio. According to The Wall Street Journal, the deal would allow ChatGPT owner OpenAI to lease the 10-gigawatt project being built by SoftBank subsidiary SB Energy in the Piketon area of Ohio.
The total cost of the project, including the chips inside, is expected to exceed $500 billion. The facility, which is projected to supply 800 megawatts of electricity by 2028—enough for 640,000 households—will meet its energy needs through a $33 billion natural gas power plant deal signed between the U.S. and Japan.
The $250 billion guarantee planned by Nvidia only covers the lease cost. The roughly $350 billion additional cost of the chips to be used in the center is not yet guaranteed. Nvidia, led by Jensen Huang, said talks are continuing for the chips as well.
In June, The Information reported that OpenAI, led by Sam Altman, had signed a potential 20-year lease agreement. If the new deal goes through, OpenAI will occupy space in the world's largest artificial intelligence data center on land the U.S. Department of Energy has leased to SoftBank. With 166 active and 57 planned data centers, Ohio ranks fourth in the U.S. behind Virginia, Texas and California.
This agreement will expand OpenAI's infrastructure goals, having previously leased capacity from tech giants such as Amazon, Oracle and Microsoft.
Funding Concerns
Critics like Boston College Associate Dean Aleksandar Tomic view the deal as the latest example of circular financing in the AI sector. "OpenAI and others currently need computing power, but apparently they do not have the revenue or financial capacity to cover the capital expenditures to support their operations," Tomic said.
"Nvidia steps in and provides funding, so they can keep buying Nvidia chips. Where the demand for the entire chain comes from, or where the money comes from, is becoming a big problem," he added. Recalling that Nvidia committed $100 billion in investment to OpenAI in 2025 and $30 billion in early 2026, Tomic argued that companies paying each other for cloud services makes demand appear larger than it is, resembling the dot-com bubble of 1999.
However, Founder's ETF founder Michael Monaghan sees it differently: "As with many things in life, there is a negative interpretation and a positive one. The positive interpretation is that it's an economy. I go to my coffee shop and buy coffee, that is me purchasing something from them. They can then take that money and invest it in my fund. That's not necessarily circular financing, it's just an economy."
Political Reactions
Meanwhile, data centers have become a political flashpoint across the U.S. Last week, New York became the first state to impose a one-year moratorium on new data center construction. In Utah, the state senate president lost his Republican primary after defending a data center backed by investor Kevin O'Leary.
Texas Governor Greg Abbott called for a ban on data center construction in rural areas at the end of June. Democratic Congressman James Talarico introduced a proposal to end tax breaks for data center construction, require operators to cover grid costs, and give local communities more say. A recent Gallup poll shows that 71 percent of Americans oppose data center construction.
Monaghan does not believe the political pressure will force the sector to retreat: "I'm not aware of a major historical precedent for something this big being rolled back once completed. I don't see excessive regulatory risk in this particular case."
After the news broke, Nvidia shares fell 4.9 percent by midday Monday. Tomic said the market jitters stem from the question: "If everything is fine, why is such a deal needed?" Nvidia shares are up 4 percent year-to-date, 11 percent over the past year, and 908 percent over the past five years.
Neither OpenAI nor Nvidia responded to Al Jazeera's request for comment.
