Nvidia Trims OpenAI Data-Center Credit Guarantee to Under $120 Billion

Today’s Focus

Nvidia is scaling back a financing guarantee it plans to extend to OpenAI for a massive data-center project in Ohio, reducing the commitment to less than $120 billion, according to The Wall Street Journal.

The Information first reported that Nvidia was near a deal to guarantee roughly $100 billion in credit for OpenAI, a structure that would let the AI company borrow against Nvidia’s balance sheet to build out computing capacity. Reuters confirmed the pullback on the Ohio site, citing people familiar with the discussions.

The arrangement is part of a broader partnership announced earlier this year in which Nvidia agreed to help finance OpenAI’s expansion in exchange for OpenAI purchasing Nvidia’s graphics processing units (GPUs). CNBC, citing The Information, reported that Nvidia is separately weighing a roughly $3 billion investment in SB Energy, the SoftBank power unit expected to supply electricity to the Ohio campus.

The Ohio project is one of several sites tied to Stargate, the AI infrastructure venture backed by OpenAI, SoftBank, and Oracle that was announced in January 2025 with a headline commitment of up to $500 billion over four years.

Nvidia did not publicly explain why the guarantee was shrinking. The Wall Street Journal reported that the parties are still negotiating the final terms and that a smaller backstop could reflect changes in projected power availability, construction timelines, or the mix of debt and equity used to fund the buildout.

OpenAI, which is not publicly traded, has been raising capital at a valuation reported by Reuters earlier this year to be near $500 billion. Nvidia’s market capitalization sits above $4 trillion, making it the most valuable company in the world by market value, according to Nasdaq data.

The Debate

Supporters argue

Backers of the arrangement, including Nvidia CEO Jensen Huang, have argued that the AI buildout requires unusual financing structures because no single company can absorb the cost alone. Huang told CNBC earlier this year that AI infrastructure is a “generational” investment comparable to the rollout of electricity or the internet.

OpenAI CEO Sam Altman has said the Stargate project will create tens of thousands of American construction and operations jobs and reduce U.S. dependence on foreign compute capacity. In a January 2025 White House appearance alongside President Donald Trump, Altman said the project would help “keep this technology in this country.”

Wall Street analysts covering Nvidia, including Wedbush’s Dan Ives, have argued that guaranteeing OpenAI’s credit locks in years of chip demand and effectively converts Nvidia’s cash-rich balance sheet into a competitive moat. Ives wrote in a client note cited by Seeking Alpha that the deal “cements” Nvidia’s central role in the AI economy. Supporters say the reduced guarantee shows the parties are being disciplined, not that the strategy is faltering.

Critics argue

Critics contend that the deal illustrates the circular nature of AI financing, in which Nvidia effectively lends money that flows back to Nvidia through chip purchases. Financial Times columnist Robert Armstrong and analysts at MacroStrategy Partnership have warned that these arrangements make the sector’s revenue growth look more organic than it is.

Sen. Elizabeth Warren (D-MA) has called for greater disclosure of AI vendor-financing deals, arguing in an August letter to the Securities and Exchange Commission that investors cannot properly assess Nvidia’s risk without seeing the terms of guarantees to private customers.

Some antitrust scholars, including Columbia Law professor Tim Wu, have argued that tying financing to chip supply could raise competition concerns if it makes it harder for rival AI labs to secure comparable hardware. Critics say the smaller Ohio guarantee may reflect early cracks in the Stargate timeline, and point to Reuters reporting that power and permitting delays have pushed back several planned sites.

What the experts say

Nonpartisan analysts have flagged concentration risk as the defining feature of this cycle. The Bank for International Settlements noted in its June 2026 quarterly review that a small number of hyperscalers and chipmakers now account for a majority of global data-center capital spending, and that vendor financing “warrants close monitoring.”

The International Energy Agency projected in its 2026 electricity report that data-center power demand will more than double by 2030, with U.S. demand alone rising by roughly 130 terawatt-hours. IEA analysts said grid interconnection queues, not capital, are becoming the binding constraint on new AI campuses.

Researchers at the Brookings Institution’s Center on Regulation and Markets have written that circular financing between chip suppliers and AI developers is not illegal but resembles patterns seen in the late-1990s telecom buildout, when Lucent and Nortel guaranteed customer purchases that later soured. Brookings fellow Aaron Klein said in a July podcast that the key question is whether end demand for AI services ultimately materializes at the scale being built for.

By the Numbers

$120 billion: upper bound of Nvidia’s revised credit guarantee for OpenAI’s Ohio data center, according to The Wall Street Journal.

$100 billion: approximate size of the credit backstop Nvidia was near agreeing to, according to The Information.

$3 billion: amount Nvidia is considering investing in SoftBank’s SB Energy unit, per CNBC citing The Information.

$500 billion: headline four-year commitment announced for the Stargate AI infrastructure venture in January 2025, per White House readout.

$4 trillion: Nvidia’s approximate market capitalization, making it the world’s most valuable public company, per Nasdaq data.

130 terawatt-hours: projected increase in U.S. data-center electricity demand by 2030, per the International Energy Agency’s 2026 electricity report.

Late 1990s: period Brookings scholars compare to the current AI vendor-financing pattern, referencing telecom-equipment guarantees that later unwound.