Nvidia scales back funding guarantee

Microchip giant Nvidia has significantly scaled back its proposed financial backing for a massive artificial intelligence data centre project in Ohio. According to reporting from the Wall Street Journal, the chipmaker is now expected to initially guarantee less than $120 billion. That figure represents a sharp reduction from the $250 billion figure previously under discussion.

The strategic shift follows mounting anxiety among investors regarding Nvidia's heavy risk exposure tied to such monumental financing commitments. This recalibration arrives on the heels of a separate initiative where Nvidia teamed up with six major financial institutions to establish compute financing platforms designed to pull in over $500 billion in third-party capital for broader AI infrastructure development. Nvidia did not immediately respond to a request for comment outside regular business hours, and OpenAI declined to comment on the matter.

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Negotiations between Nvidia and OpenAI are currently nearing an agreement that would see the chipmaker confine its financial backstop exclusively to the first phase of the development. The proposed site in southern Ohio's Piketon area sits at the core of the Stargate AI infrastructure initiative and is being built on land controlled by the US Department of Energy as part of a public-private partnership. SB Energy, a subsidiary of SoftBank, is developing the expansive property, which is slated to become the largest data centre project ever announced if carried to completion.

Financial backing from Nvidia was originally conceived to solve a practical problem: OpenAI doesn’t have an investment-grade credit rating. Without one, SB Energy would face steeper borrowing costs when financing the diverse power generation sources needed to keep a facility of this scale running. Nvidia’s backing would essentially let OpenAI’s landlord borrow money as if its tenant had a pristine balance sheet. Some of the talks also touch on funding for the chips and accelerators themselves, with estimates for that component alone reaching around $350 billion.

Phase one of the Ohio project targets approximately 800 MW of generation capacity by 2028, with total costs for the Stargate initiative potentially exceeding $500 billion when factoring in chips and related infrastructure. OpenAI and SoftBank had already each committed $500 million to SB Energy back in January 2026, totaling $1 billion earmarked for developing AI data center infrastructure across the US. In 2025, the company issued a letter of intent to deploy at least 10 GW worth of Nvidia systems, with the first gigawatt targeted for the second half of 2026.

By providing financial guarantees tied to data center construction, Nvidia is moving further down the value chain. If the data centers don’t get built, the chips don’t get sold, and at the scale Stargate envisions, even minor financing hiccups could delay orders worth tens of billions of dollars. For Nvidia shareholders, guaranteeing billions in financing represents meaningful contingent liability, and if AI demand cools, those guarantees could become expensive quickly.

Despite its staggering valuation of $852 billion, OpenAI remains unprofitable, keeping scrutiny high regarding its capacity to fund massive commitments independently. The proposed development would help OpenAI move towards owning AI infrastructure, although its ability to fund large-scale commitments remains under scrutiny.

Project Metrics and Financial Scope

• Initial Nvidia Guarantee: Less than $120 billion, reduced from previous discussions of $250 billion, according to the Wall Street Journal.
• Projected Capacity: 10-gigawatt total capacity, with phase one targeting roughly 800 MW of generation capacity by 2028.
• Valuation and Funding: OpenAI carries an $852 billion valuation while remaining unprofitable.
• Developer: SB Energy, a SoftBank subsidiary, building on US Department of Energy land in southern Ohio.

What to Watch Next

Negotiations remain fluid, with a formal deal potentially signed as early as this weekend. OpenAI is still discussing a binding lease for the full 10-gigawatt project in Ohio, according to the Wall Street Journal.