Nvidia is in talks to provide a roughly $250 billion backstop for OpenAI as part of a massive data center project, one of the most ambitious financial transactions yet in America’s artificial-intelligence boom.
The guarantees from Nvidia would help the ChatGPT maker lease a 10-gigawatt project that SoftBank is developing in southern Ohio, people familiar with the matter said. In total, the project could cost more than $500 billion, including the chips that would go inside the data centers. It would be the largest data center project announced to date.
The power for the project is controlled by the U.S. government and funded separately by Japan under a recent trade deal. Commerce Secretary Howard Lutnick is involved in deciding who will get the power, some of the people said.
Nvidia’s backing would allow the data center developer, Japanese billionaire Masayoshi Son’s investment firm SoftBank, to raise debt at more favorable terms than it could if OpenAI had no financial backer, since OpenAI has no investment-grade credit rating as an unprofitable private company. The AI company has been in advanced talks to lease the site for several weeks, people familiar with the matter said.
OpenAI is among the companies that has shown most interest in the site, while Anthropic, Microsoft and Google have also spoken to Lutnick about it in recent weeks, one of the people said.
AI companies are desperate to secure chips and power needed to run their models, making megaprojects that have government support or guaranteed power increasingly attractive.
Under the arrangement, Nvidia would guarantee a series of financing vehicles intended to make lenders feel more confident that the funding behind the project is secure, the people said. Terms haven’t been finalized and the deal could fall apart.
The $250 billion guarantee would cover the data center lease and debt needed to fund its build out, but not the Nvidia chips that would go inside it. Nvidia, which has invested $30 billion in OpenAI, is also discussing a deal to finance the chip purchase for OpenAI, which could total $350 billion, people familiar with those discussions said. Such circular funding arrangements have caused concerns that the industry is vulnerable if investor sentiment shifts or growth slows for AI companies.
The campus would require roughly 10 gigawatts of electricity, or enough to power several million homes, and take many years to complete. The first phase of the project is expected to be finished in 2028, with around 800 megawatts of power, according to people familiar with the deal.
Lutnick and the Trump administration also have a lot riding on the Ohio project. As part of its commitment to invest in the U.S. in return for lower tariffs, Japan agreed to invest $33 billion in a natural-gas power project on federal land in Ohio that would be operated by SoftBank Energy, which is effectively controlled by Son.
SoftBank Energy has received an investment from OpenAI and SoftBank itself is one of the largest investors in OpenAI. In March, Lutnick, Son and Energy Secretary Chris Wright broke ground on the data center complex. SoftBank is also involved in a large data-center effort with OpenAI and Oracle that has been heralded by President Trump.
By using federal land in Ohio, the government and its partners hope to avoid the permitting headaches and local opposition that are snarling data centers across the country. The project is on a decommissioned uranium-enrichment site about 50 miles south of Columbus. It will still take time to finalize the financing and acquire all the equipment.
The U.S. government will provide a fee to SoftBank Energy for operating the power plant, one of the people said. Japan and the U.S. will split the power sales until Japan recoups its $33 billion, after which the American government will get 90% of the revenue.
The arrangement shows how the administration is trying to accelerate activity in critical industries by directly partnering with the private sector.
The proposed structure reflects a shift under way in how the largest AI build-outs are being financed. Investment-grade technology companies are increasingly using their balance sheets to help smaller companies borrow money for their infrastructure needs, a phenomenon known within the industry as a “credit wrapper.”
Google, for instance, has backstopped some data centers for Anthropic, in part to increase sales of its in-house AI chips, known as tensor processing units.
The data center would be OpenAI’s first as a tenant, bringing it closer to controlling the infrastructure it now primarily rents from cloud providers such as Microsoft, Amazon and Oracle. The company recently raised its projected spending on computing power to around $750 billion through 2030, up from a projection of roughly $600 billion earlier this year. It isn’t clear how the new deal would affect those projections.
The company and Anthropic are racing toward IPOs with eye-watering valuations, increasing pressure on them to continue growing quickly.
With a roughly $5 trillion market value, Nvidia is also racing to lock in greater chip demand. In its most recent annual report, the company warned that data-center funding arrangements could lower its near-term cash flows and increase its exposure to customer credit risk.
Write to Anissa Gardizy at anissa.gardizy@wsj.com, Amrith Ramkumar at amrith.ramkumar@wsj.com and Corrie Driebusch at corrie.driebusch@wsj.com