Nvidia's $250 Billion Guarantee Proposal Sparks Market Concerns

Nvidia's deal with OpenAI sent shockwaves through the market on July 28, 2026, when reports emerged that the chipmaker was negotiating a $250 billion financing guarantee for an OpenAI data center in Ohio.

The proposed deal would have seen Nvidia absorb the loss if OpenAI failed to make payments, raising concerns about contingent liability and excessive financial risk. As a result, Nvidia's shares dropped nearly 5% to $196.51, erasing roughly $250 billion from its market value.

The incident drew comparisons to circular financing arrangements from the dot-com era, where suppliers financed their own customers' purchases, creating a cycle of revenue growth without true underlying demand. Critics argued that Nvidia's deal structure was similar, with the company investing in AI companies and infrastructure firms that would use the capital to lease computing capacity or buy systems containing Nvidia chips.

Nvidia scaled back its plans and eventually finalized a $105 billion deal on August 17, 2026, which saw the company commit to funding land, power, and the shell for Ohio's PORTS-Pike Technology Campus. The campus will exclusively run Nvidia GPUs, potentially using up to 1.5 million chips.

The total financial relationship between Nvidia and OpenAI is estimated to reach $600 billion, with risks remaining despite the finalized deal. Nvidia's balance-sheet exposure remains substantial, and the structural question of whether the company is taking on excessive risk does not go away.