When does the guarantee take effect?

The guarantee's obligations don't take effect until the site's commissioning dates, which start in 2028.

What happens if OpenAI defaults?

If OpenAI becomes insolvent and defaults or stops paying rent, Nvidia owes the difference between the lease's minimum guaranteed value and what SB Energy recovers. OpenAI has agreed to reimburse Nvidia for any disbursed amounts.

AI Business & IndustryYahoo Finance AI1h agoAug 26, 2026, 04:01 JST2 min read

Nvidia backs OpenAI leases with $105 billion cap

Send on LINE

Key takeaway

Nvidia has guaranteed up to $105 billion of OpenAI's data center leases in Ohio. The guarantee is a credit backstop, not new equity.
Nvidia only pays if OpenAI defaults or stops paying rent.
The deal is temporary and expires once OpenAI achieves a satisfactory credit rating.

3 Key Points

What happened
Nvidia has guaranteed up to $105 billion of OpenAI's data center leases at the PORTS-Pike campus in Ohio. The guarantee covers the first 4.25 gigawatts of the site's expected 8 gigawatts of compute load.
Why it matters
This is not new equity investment; it's a credit backstop. Nvidia only pays if OpenAI defaults or stops paying rent, and then only the shortfall after SB Energy recovers costs. The commitment is designed to be temporary, ending when OpenAI achieves a satisfactory credit rating or after 20 years.
What to watch
The $105 billion cap exceeds Nvidia's cash and marketable securities of $50.3 billion and $30.2 billion combined. However, Nvidia's revenue for the fiscal first quarter was $81.6 billion, up 85% year over year, and its stock trades at about $215, suggesting investors are not concerned.

Ask the AI about this article →

Summaries like this, in your inbox every morning.

Get news like this every morning — free

Context & Analysis

In March, Nvidia's CEO Jensen Huang said the company's $30 billion investment in OpenAI might be the last time it buys shares, reasoning that OpenAI's eventual public offering would close that window. Five months later, Nvidia found another way to commit billions: residual value guarantees on OpenAI's leases. This document shows Nvidia's strategy is to lend its balance sheet instead of buying more equity, a move that costs nothing upfront and locks the next OpenAI campus exclusively to Nvidia hardware.

The deal's structure is revealing: it is temporary, designed to last until OpenAI can borrow on its own credit. Nvidia's financial strength makes the $105 billion cap manageable, as its revenue and operating income remain robust. However, investors should note that the deal ties Nvidia more closely to OpenAI's fortunes, and if a bill ever comes due, it would likely arrive when Nvidia's earnings are already under pressure. The entire arrangement underscores a shift from equity investment to credit support, a strategy that is cheaper on day one but carries long-term risk.

FAQ

When does the guarantee take effect?: The guarantee's obligations don't take effect until the site's commissioning dates, which start in 2028.
What happens if OpenAI defaults?: If OpenAI becomes insolvent and defaults or stops paying rent, Nvidia owes the difference between the lease's minimum guaranteed value and what SB Energy recovers. OpenAI has agreed to reimburse Nvidia for any disbursed amounts.

Yahoo Finance AIRead Original Article