Nvidia OpenAI deal talks stir old tech-bubble financing fears
Nvidia is reportedly discussing a $250 billion backstop for an OpenAI-linked Ohio data center, reviving investor worries over vendor financing.
By Frankie Delgado · News Reporter
3 min read
The reported Nvidia OpenAI deal has put a very old Wall Street worry back on the table: what happens when a tech seller helps finance the customer buying its products.
The Wall Street Journal reported Sunday that Nvidia is in discussions to guarantee $250 billion in financing tied to an OpenAI lease at a data center under construction in Ohio. The Journal said the site could cost more than $500 billion, making it the biggest data-center project announced so far.
Nvidia and OpenAI did not respond to MarketWatch requests for comment. Nvidia shares fell 5% in Monday trading after the report landed.
What is vendor financing in the Nvidia OpenAI deal?
Vendor financing is when a company helps fund a customer’s purchase of its own products or services. In this case, analysts are focused on whether Nvidia, the dominant AI-chip supplier, could help support financing for infrastructure that would likely drive more demand for AI computing.
Seaport Research analyst Jay Goldberg told MarketWatch he did not know the full terms or how likely the arrangement was, but said such a deal would be difficult to defend for Nvidia if it happens.
Goldberg pointed to Lucent, the telecom-equipment maker that used vendor financing in the 1990s to support sales. He told MarketWatch that the practice “essentially broke that company” and warned that these arrangements often end badly.
Jefferies technology strategist Jeffrey Favuzza also flagged investor concern in a client note, saying late-night feedback described the report as the clearest and largest circular-financing headline yet, while noting investors had already been watching similar arrangements in AI.
How big is the Ohio data-center plan?
The Ohio project is planned for a decommissioned uranium-enrichment site and would require 10 gigawatts of power, according to MarketWatch. The campus is on federal land in southern Ohio.
The Department of Energy has said Japan agreed to invest $33 billion in a natural-gas power project in exchange for lower tariffs. That power project will be run by SB Energy, a SoftBank Group subsidiary, and OpenAI is also an investor in SB Energy.
Under the structure described by MarketWatch, the U.S. government would pay SB Energy a fee to run the plant. Revenue would be split between Japan and the U.S. until Japan recovers its $33 billion investment, after which the U.S. would keep 90% of the revenue from OpenAI, identified as a future buyer of the power.
Commerce Secretary Howard Lutnick promoted the project in a March post on X, saying it was made possible by President Trump’s trade and tariff policy and would create thousands of jobs, reduce electricity costs for families and provide energy infrastructure for AI.
Why are investors watching AI financing so closely?
The proposed backstop comes as OpenAI and major chipmakers have stacked up a web of AI infrastructure agreements. The Financial Times reported in February that Nvidia was withdrawing from a $100 billion agreement first announced in September and replacing it with a $30 billion equity investment.
OpenAI also has chip-deployment partnerships with Broadcom and Advanced Micro Devices, according to MarketWatch. The Journal previously reported that OpenAI committed $300 billion to Oracle for data-center capacity, much of which Oracle would use to buy Nvidia GPUs.
Nvidia also owns $2 billion of cloud provider CoreWeave’s stock, MarketWatch reported. For investors, that growing loop of chipmakers, cloud companies, data centers and AI customers is the part that keeps getting louder.
This story draws on original reporting from MarketWatch.