Nvidia Downsizes Massive Data Center Guarantee by $1 Trillion
Nvidia and OpenAI have renegotiated their financing agreement for a massive data center campus in Ohio, scaling back Nvidia's financial guarantee from $2.5 trillion to under $1.2 trillion.
The reduced guarantee is due to investor concerns over the risk exposure of Nvidia's practice of leveraging its own balance sheet to drive chip demand. After initial reports of the 2.5 trillion dollar plan, Nvidia's stock price fell by 5% on the same day.
The new plan involves a 'phased guarantee' where Nvidia will only provide financial backing for the first phase of the project, covering about 5 GW of computing power. The financing arrangements for the remaining 5 GW will be decided at a later date.
This data center campus is being developed by SB Energy, a subsidiary of SoftBank, and once completed, it will be the largest announced worldwide to date. The total amount involved in the entire project may reach as high as $3.5 trillion.