OpenAI is in discussions with Nvidia over a financing backstop of up to $250 billion to support the lease of a planned artificial intelligence data center campus in Pike County, Ohio. The discussions are ongoing and remain subject to change. (27/07)

According to a person familiar with the discussions, the proposed backstop would allow OpenAI to raise debt by relying on Nvidia's credit. The guarantee would cover lease and construction debt rather than Nvidia chips, which are being discussed separately.

Nvidia declined to comment on the negotiations.

Planned Ohio AI Data Center Could Cost More Than $500 Billion

The planned campus would have a capacity of 10 gigawatts and would be built on the site of a former uranium-enrichment plant in Pike County, Ohio.

According to a person familiar with the discussions, the project could cost more than $500 billion in total.

Based on CNBC's analysis of data from the U.S. Energy Information Administration, a 10-gigawatt facility uses electricity roughly equivalent to the annual power consumption of 8 million U.S. households.

Another person familiar with the plans said discussions about both the project and its financing are still in progress and could change.

AI Infrastructure Investment Continues to Expand

OpenAI has been increasing its computing capacity since launching ChatGPT in 2022 as it seeks to meet future demand for its AI models and services.

The company is competing with Anthropic, Google, Amazon, and Meta, which are also spending hundreds of billions of dollars in capital expenditures to expand their AI infrastructure.

In September, Nvidia announced plans to invest up to $100 billion in OpenAI as part of a strategic partnership that included deploying at least 10 gigawatts of Nvidia systems. The investment did not take place, although Nvidia later contributed $30 billion to OpenAI's funding round that closed in March.

OpenAI Advances Infrastructure and Public Listing Plans

Nvidia CEO Jensen Huang said it "might be the last time" the company invests in OpenAI before the AI company becomes publicly listed.

OpenAI confidentially filed for an initial public offering with the U.S. Securities and Exchange Commission in June but has not announced a timeline for its market debut.

The company is valued at nearly $1 trillion by private investors, who expect OpenAI to maintain its leadership in artificial intelligence while developing a long-term business model. The company also faces growing competition from open-weight AI alternatives, largely from China.

The Ohio data center campus is being developed by SoftBank and SB Energy in partnership with the U.S. Department of Energy. SoftBank is a major investor in OpenAI, and the two companies announced plans earlier this year to invest $1 billion in SB Energy.

PHOTO: UNSPLASH

This article was created with AI assistance.

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