OpenAI signs 10-gigawatt Ohio data-center lease with Nvidia-backed SB Energy

Nvidia backstops $105 billion for first phase, takes $1.5 billion equity stake

OpenAI has signed a 20-year, 10-gigawatt data-center lease in southern Ohio with SoftBank’s SB Energy — a project partly backed by Nvidia that is expected to become one of the largest artificial-intelligence hubs to date, The Wall Street Journal reported Monday.

The arrangement rests on a financing structure designed to use Nvidia’s balance sheet to make the project easier and less expensive to finance. Nvidia agreed to backstop a portion of the value of the completed data center at the site, beginning with the first phase, which represents around 5 gigawatts of power. In return, Nvidia will serve as the exclusive chip provider for the first half of the Ohio campus and take an equity stake in SB Energy, according to people familiar with the matter.

The backstop is structured to give lenders confidence that the data centers would retain value even if OpenAI were no longer the tenant, the people said. If OpenAI were to walk away from the project, SB Energy would first try to lease the site to another customer at the same price; if it could not find a suitable replacement, the firm would try to sell the site, and Nvidia would pay any difference in value, up to $105 billion if the initial phase is completed. The commitment requires a series of mitigation steps before Nvidia would be obligated to make any payments, and it covers completed data centers rather than facilities under construction. Nvidia has the option to expand its commitment later to the full campus.

The deal caps weeks of negotiations. In recent days, OpenAI, SB Energy and Nvidia reworked the scale of the backstop to address investors’ concerns about the chip maker’s risk exposure, according to people familiar with the matter. Morgan Stanley advised Nvidia.

The structure is the latest example of chip firms using their balance sheets to help AI startups secure the enormous computing capacity their businesses require. Chip firms including Nvidia and Google have increasingly agreed to back arrangements that let startups such as OpenAI and Anthropic sign leases that developers can raise debt against while trying to manage their own risk.

Nvidia initially planned to guarantee all 10 gigawatts of OpenAI’s data-center commitments upfront, which could have totaled around $250 billion, the Journal previously reported. Nvidia shares fell 5% in late July after the Journal earlier reported on the discussions of that larger guarantee.

Beyond the backstop, Nvidia is expected to reap commercial benefits from the project, according to people with knowledge of the deal. The company plans to sell hundreds of billions of dollars’ worth of chips into the initial phase of the Ohio facility, people with knowledge of the deal said, and has discussed providing financing for OpenAI’s purchase of its chips for the campus.

Separately, Nvidia said it agreed to make a $1.5 billion equity investment in SB Energy, the project’s developer. SB Energy is majority owned by Japan’s SoftBank and counts OpenAI as an investor. The developer is working with bankers on an IPO as soon as next month, aiming to raise between $5 billion and $7 billion, people familiar with that planned deal said.

The southern Ohio campus is partly located on a former uranium-enrichment site owned by the U.S. Department of Energy and is expected to generate enough energy to power 7 million homes, according to the Journal. Commerce Secretary Howard Lutnick and Energy Secretary Chris Wright have been deeply involved in the project.

The data-center campus will rely on the construction of a 9.2-gigawatt natural-gas plant, which is owned by the U.S. government and financed by Japan under a recent trade deal.