Nvidia agreed on August 17 to guarantee up to $105 billion in lease costs for a massive data center in Ohio that will house OpenAI's operations, with the first 800 megawatts coming online in 2028.
The move reflects Nvidia's strategy of using its balance sheet to lock customers into long-term infrastructure where its chips run, securing demand as it projects $600 billion in fiscal 2028 revenue alone.
However, the guarantee—paired with a $500 billion financing consortium Nvidia formed days earlier—raises concerns about circular financing, where Nvidia effectively funds customers' ability to purchase Nvidia chips.
What happened
On August 17, Nvidia agreed to guarantee up to $105 billion to help OpenAI lease a massive data center in Pike County, Ohio, developed by SB Energy. The facility could reach 8 gigawatts of capacity, with the first 800 megawatts coming online in 2028, and OpenAI has committed to a 20-year lease. Nvidia is also investing $1.5 billion directly into SB Energy and will be the facility's exclusive chip supplier.
Why it matters
Nvidia is using its balance sheet to secure long-term sites where its own chips will run across multiple hardware generations—a pattern that extends across the industry. The company projects roughly $600 billion in fiscal 2028 revenue alone, and demand comes not just from OpenAI but from SpaceX (targeting 10 gigawatts by end of 2027) and the four largest hyperscalers (expected to spend roughly $700 billion on AI chips this year). By tying customers into infrastructure deals, Nvidia reduces dependence on any single buyer's spending decisions.
What to watch
The guarantee covers lease and power payments plus a minimum-value commitment on the site—not the full $105 billion or all of OpenAI's obligations. If OpenAI defaults, Nvidia absorbs the difference between that floor value and whatever the site fetches if re-leased or sold. This structure comes a week after Nvidia formed a $500 billion financing consortium with BlackRock, Blackstone, KKR, Apollo, Brookfield, and Goldman Sachs, raising questions about whether the company is funding customers' ability to buy Nvidia chips.
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Nvidia's $105 billion guarantee reflects a deliberate strategy to embed its chips into long-lived infrastructure that customers cannot easily replace. The company's projected fiscal 2028 revenue of roughly $600 billion—with revenue growth expected to accelerate toward 97% this quarter—depends on sustained demand across multiple customer segments. By securing OpenAI's commitment through the Ohio deal, Nvidia ties one of the largest AI spenders into a 20-year relationship where switching chip suppliers becomes operationally unfeasible. This pattern extends beyond OpenAI: SpaceX is targeting 10 gigawatts of compute by end of 2027, and the four largest hyperscalers are expected to spend roughly $700 billion on AI chips this year alone.
Yet the guarantee sits within a broader financing ecosystem that invites scrutiny. A week before the Ohio announcement, Nvidia formed a $500 billion financing consortium with BlackRock, Blackstone, KKR, Apollo, Brookfield, and Goldman Sachs. Together, these moves—infrastructure guarantees plus a massive financing facility—create a mechanism where Nvidia funds the very customer spending that drives its own chip sales. While Nvidia's exposure is capped (the guarantee covers only a portion of lease and power payments plus a minimum-site value), the structure does create a form of circular dependency: if OpenAI cannot generate sufficient revenue from AI services to pay its lease, Nvidia absorbs the loss.
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