Nvidia backs OpenAI leases with $105 billion cap

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.