Nvidia Slashes Guarantee for OpenAI Data Center Project

Nvidia has scaled back its proposed financial guarantee for an OpenAI data center project in Ohio. The company's initial commitment of up to $250 billion is now reduced to less than $120 billion, according to a report in the Wall Street Journal.

This change represents a significant restructuring of Nvidia's role in financing the planned facility, which will be developed by SB Energy, a subsidiary of SoftBank. Under the revised arrangement, Nvidia will guarantee financing for the first phase of the project, representing roughly 5 gigawatts of capacity, or half of the total proposed capacity.

The Ohio project is one of several large-scale AI data center developments planned by OpenAI and other companies. These projects are expensive to build and operate, pushing technology firms to seek outside financing. Nvidia's move has been seen as a sign of caution in the face of potential slowdowns in demand for its processors.

Alan Howard, senior analyst with Omdia, said Nvidia 'ran headlong' into the AI market opportunity and was sticking its neck out too far. The pivot to Wall Street financing positions Nvidia's risk profile to a more palatable level.'