Nvidia plans approximately $250 billion financing commitment to bolster OpenAI's major data center infrastructure buildout ambitions.

Semiconductor giant Nvidia is reportedly undergoing talks with OpenAI to provide funding guarantees for a data centre in Ohio. The $250 billion deal, first reported by The Wall Street Journal, would help ChatGPT's owner lease a 10-gigawatt project that SB Energy, a subsidiary of SoftBank, is building in Piketon, Ohio, 68 miles south of Columbus. The project could cost more than $500 billion when including chips, and is expected to deliver as much as 800 megawatts of electricity by 2028—enough to power 640,000 homes. The power supply will come from a separate $33 billion US government deal with Japan for a natural gas plant.

The $250 billion guarantee covers the data centre lease but not the chips, worth another $350 billion, though Nvidia said it is also in talks on that front. In June, The Information reported that OpenAI signed a potential 20-year lease controlling both its own equipment and facility payments. If the deal proceeds, the Ohio centre will be a public-private partnership where the US Department of Energy allowed SoftBank to build the world's largest AI data centre on leased land.

Ohio ranks fourth nationally in data centres with 166 operational facilities and another 57 planned, behind Virginia, Texas, and California. The deal represents a significant shift for OpenAI, which has otherwise been renting infrastructure from Amazon, Oracle, and Microsoft.

Analysts question whether these multibillion-dollar commitments are sustainable. OpenAI is valued at $852 billion yet remains unprofitable, while its infrastructure partners hold as much as $96 billion in debt as of November. Aleksandar Tomic, associate dean at Boston College, characterizes the arrangement as circular financing that obscures genuine market demand. "What is happening right now with OpenAI and others is that they have the need for computing, but apparently they don't really have the revenue or the financial capability to engage in the capital expenditures necessary to support their activities," Tomic said. "Nvidia steps in and provides some funding so they can continue buying Nvidia chips. Where the demand for the whole chain is coming from or where the money is coming from becomes a really big issue."

The pattern has accelerated: in 2025, OpenAI committed to buying $250 billion of cloud services from Microsoft, one of its backers. Also in 2025, Nvidia announced a $100 billion investment into OpenAI for data centre buildout using its chips. By early 2026, Nvidia pledged an additional $30 billion. Companies including Nvidia, Microsoft, and Oracle have invested billions into AI developers who then become major purchasers of their cloud services—essentially circulating the same capital through multiple entities and inflating revenue figures. Tomic draws parallels to 1999, when companies purchased from each other to create an illusion of stronger demand, ultimately contributing to the dot-com bubble. "Companies would engage in circular financing deals where they would essentially buy from each other and make it look like there was greater demand for their services than there really was. At some point, the money runs out," he said. "The demand is not as big as it appears to be because the companies are buying from each other, using their own money to some degree, as opposed to OpenAI having tremendous customer demand, monetising it properly and then using customers' money to buy Nvidia chips. They're essentially using Nvidia's money to buy Nvidia chips."

Michael Monaghan, founder of Founder's ETF, disputes this characterization. "Like a lot of things in life, there is a downside or upside spin, and that's kind of the downside spin. The upside spin is that this is an economy. You caught me having just grabbed a coffee at my coffee shop, so that's me buying something from him. He could then take that money and invest it in my fund. That's not necessarily circular financing. That's just an economy. I understand the pushback, but I think there is less substance there," he said.

Nvidia's stock fell 4.9 percent in midday trading on Monday following the announcement. Tomic views this as symptomatic of deeper doubts. "If everything is so hunky-dory and everything is full steam ahead in the entire AI ecosystem, why is this kind of deal even needed? I think that's what's giving the market jitters because the question is: Why is this necessary? Why is Nvidia trying to juice up demand for its chips in this particular way?" Despite this volatility, Nvidia's stock is up 4 percent year-to-date, 11 percent over the past year, and 908 percent over five years.

Political opposition to data centre expansion has emerged across the country, creating headwinds for future projects. New York became the first state to formally implement a one-year moratorium on new data centre construction, with at least a dozen other states proposing similar measures. In Utah, the state Senate president lost his Republican primary re-election bid after supporting an investor Kevin O'Leary-backed data centre, defeated by an opponent opposed to the project. Texas Governor Greg Abbott called in late June for a ban on data centre construction in rural areas. Meanwhile, James Talarico, a state Democratic congressman running against Republican Ken Paxton for a US Senate seat, proposed ending tax breaks for data centre construction—significant given that Texas has 466 total data centres, either operational or planned, second only to Virginia. Talarico's proposal would also require operators to pay for power grid infrastructure and grant local communities veto power, aligning with a Gallup poll showing 71 percent of Americans oppose data centre projects in their areas.

Monaghan does not expect political pressure to significantly slow the industry. "I don't know if there's a major historical precedent for undoing something that large once it's completed. So in this specific case, I don't think there's a lot of regulatory risk. On the general use of data centres, I don't see a kind of the Luddite version of the world becoming a real worldview," he said.

Neither OpenAI nor Nvidia responded to requests for comment.