Nvidia finalized a $105 billion guarantee behind an 8-gigawatt OpenAI data center in Pike County, Ohio, on Aug. 17, 2026146. Three weeks of public bargaining closed with it23. The talks opened at $250 billion and ended near half that. Read the gap, rather than the headline. Even the chipmaker with the industry's biggest balance sheet found a limit to how much risk its investors would carry for one buyer.
From Letter of Intent to Backstop
The Ohio guarantee traces to a September 2025 letter of intent1. Nvidia pledged up to $100 billion, paid out as each gigawatt came online, tied to at least 10 gigawatts of its systems on the Vera Rubin platform. Jensen Huang, Nvidia's founder and chief executive, framed the deal against the company's own history with OpenAI. "NVIDIA and OpenAI have pushed each other for a decade, from the first DGX supercomputer to the breakthrough of ChatGPT. This investment and infrastructure partnership mark the next leap forward — deploying 10 gigawatts to power the next era of intelligence."
Sam Altman put it at the level of the economy. "Everything starts with compute. Compute infrastructure will be the basis for the economy of the future, and we will utilize what we're building with NVIDIA to both create new AI breakthroughs and empower people and businesses with them at scale."1 Greg Brockman, OpenAI's cofounder and president, pointed at the scale already built. "We've been working closely with NVIDIA since the early days of OpenAI. We've utilized their platform to create AI systems that hundreds of millions of people use every day. We're excited to deploy 10 gigawatts of compute with NVIDIA to push back the frontier of intelligence and scale the benefits of this technology to everyone." Count the tense each man uses. Huang looks back a decade. Altman looks forward to an economy. Brockman points at the customers already there.
Then it stalled. Wikipedia's account notes that by January 2026 the September memo sat unused, with both firms reportedly rethinking its shape6. Ambition came back that summer, bigger and riskier23. On July 27, CNBC and others reported talks on a $250 billion backstop. It was a debt guarantee sitting under fundraising by SB Energy, the SoftBank unit building the campus, rather than an equity check. SB Energy planned to raise more debt from unnamed lenders, and Nvidia's promise sat under that debt as the collateral making lenders comfortable.
The Ohio Wager
Pike County sits roughly 50 miles from Columbus, on federal land3. Reporting put the total build near $500 billion for 10 gigawatts. Japan committed $33 billion, and the deal gives the United States 90% of power revenue once Japan gets its money back. The guarantee left out the chips. Those sat in a separate talk reporting valued near $350 billion, stacked on top rather than folded in.
Investor pushback arrived fast. The Wall Street Journal reported on Aug. 14 that Nvidia cut its exposure below $120 billion, citing worry among its own shareholders about risk tied to one buyer4. Three days later the two settled6. An 8-gigawatt lease runs 20 years, backed by a $105 billion guarantee, smaller than July's plan on every measure. Colette Kress, Nvidia's chief financial officer, carries that exposure on the books5. Sarah Friar holds the matching seat at OpenAI, running a balance sheet built from guarantees, leases and vendor promises more than cash.
A Balance Sheet Crowded With Giants
The Ohio deal joined a stack of OpenAI commitments built inside a year. AMD signed in October 2025 for six gigawatts of chips starting with the MI4506. An option came with it, letting OpenAI buy up to 160 million AMD shares, near a tenth of the company, tied to deployment and share-price marks. Oracle committed $300 billion in computing power over five years from September 2025. Stargate, the venture joining OpenAI, Oracle, SoftBank and MGX, launched in January 2025 with a $500 billion estimate for the wider US buildout. Broadcom joined too, on a custom chip reportedly aimed at 2026, covered elsewhere in this series.
Read together, the pattern breaks from how earlier computing cycles paid for themselves. Cloud firms built data centers from earnings and ordinary project debt. OpenAI's buildout runs on supplier guarantees, where the company selling the chips also backs the debt that buys them.
The Circularity Question
Analysts and reporters landed on one label for that arrangement: circular financing. Coverage of the Ohio deal called it "a subtle, indirect subsidy from the US government, Japan, and Nvidia" flowing toward one customer's ambitions3. The mechanics fit. Nvidia sells the chips that make its own record revenue, then backs the debt that pays for the buildings holding them. A loop forms, where the guarantee becomes collateral for demand it also supplies.
Nvidia's own pullback, four weeks after July's number surfaced, reads as a quiet concession. Cutting $250 billion to $105 billion, and 10 gigawatts to eight, moved the deal from one its biggest holders questioned to one they would back. The circularity remains at smaller scale. Risk concentration eases.
Alan Howard, a senior analyst at the technology research firm Omdia, read the cut for what it fixed. Writing for Network World on Aug. 21, 2026, he traced the whole arc in four sentences: "It seems that Nvidia, in their enthusiasm, bolstered by their success, ran headlong to prop up the AI market opportunity momentum. In the banking and finance world, underwriting prefers to spread the risk amongst partners to minimize individual risk. Nvidia was sticking their neck out a bit too far and the risk to their balance sheet was making investors very nervous. The pivot to Wall Street financing positions Nvidia's risk profile to a much palatable level," Howard said7. His verdict sits in that last clause: the guarantee moved from reckless to palatable once lenders began sharing the exposure Nvidia had carried alone.
Pablo Hernández de Cos, general manager of the Bank for International Settlements, pointed at the same mechanism from a monetary authority's seat. Speaking at the Global Fintech Fest in Mumbai on Sept. 10, 2026, he named the structure plainly: "Under so-called circular financing, chip manufacturers and hyperscalers take equity stakes in AI firms, which in turn commit to purchasing their chips and compute, linking these players in ways that are difficult to observe and, at times, difficult to value," de Cos said8. He skips Nvidia and OpenAI by name, yet the sentence describes Pike County's own architecture: an equity stake answered by a purchase commitment, sized differently in Ohio but built from the same two pieces.
A Quarter That Justifies the Bet
Nvidia's fiscal second-quarter results, reported Aug. 26, gave the guarantee a favorable backdrop. Data center revenue reached $89.0 billion, up 117% year over year, against total revenue of $96.2 billion5. Huang tied the surge to exactly the kind of buildout Ohio represents. "AI has reached its inflection point. It's doing useful work. Its tokens are productive and profitable. Now, compute is revenue."
Numbers that size complicate the skeptics' case, and the critique survives anyway. Growth above 100% shows real paying demand across a widening customer base, which the circular-financing argument tends to skip. The same quarter shows the other thing. A firm reporting $89 billion in data center revenue, backing $105 billion of debt for one buyer's single campus, is the exact mismatch analysts flagged when $250 billion first surfaced.
Nvidia cut its OpenAI guarantee from $250 billion to $105 billion, still above its $89 billion data center quarter
Nvidia's guarantee for OpenAI's Ohio campus and its fiscal second-quarter data center revenue, in billions of dollars
Each bar is a sum in billions of dollars: gray is the backstop in July's talks, magenta is the guarantee finalized Aug. 17, and blue is Nvidia's data center revenue for one quarter.
Sources: CNBC [2]; Nvidia Newsroom [5]; Wikipedia [6]. Chart by Kelly Dennis.
The numbers behind this chart
| Item | Value | Note |
|---|---|---|
| Backstop in July talks | $250B | Reported July 27, a debt guarantee under SB Energy's fundraising |
| Guarantee finalized Aug. 17 | $105B | Backs an 8-gigawatt lease that runs 20 years in Pike County, Ohio |
| Quarterly data center revenue | $89B | Nvidia's fiscal second quarter, up 117% year over year |
By the numbers
- A $105 billion Nvidia guarantee backs the Pike County, Ohio data center, finalized Aug. 17, 20266.
- Eight gigawatts: the final capacity of the Ohio lease, on a 20-year term, down from 10 proposed in July36.
- July 27 was the day the original $250 billion backstop figure became public23.
- Six gigawatts: AMD's October 2025 chip commitment, paired with warrants for up to 160 million AMD shares6.
- Data center revenue hit $89.0 billion in Nvidia's fiscal second quarter, up 117% year over year5.
- Japan committed $33 billion to the Ohio project's buildout3.
- Oracle's five-year computing contract with OpenAI, signed September 2025, totals $300 billion6.
What to watch
SB Energy's debt raise, once lenders price the $105 billion guarantee, will show whether Aug. 17's terms answered the doubt that forced July's number down36. Nvidia's next report, due in November, answers a second question5. Does data-center growth hold 117%, or start the slowdown analysts model against a bigger base? OpenAI's parallel deals with AMD, Oracle and Broadcom bear watching for timing. Either each guarantee gets called on schedule, or the Ohio pattern repeats: a big announcement, then a negotiated shrink.
Sources
- Nvidia Newsroom, "OpenAI and NVIDIA Announce Strategic Partnership to Deploy 10 Gigawatts of NVIDIA Systems," Nvidia Newsroom, Sept. 22, 2025, https://nvidianews.nvidia.com/news/openai-and-nvidia-announce-strategic-partnership-to-deploy-10gw-of-nvidia-systems
- CNBC Staff, "Nvidia and OpenAI in talks for up to $250 billion backstop to fund AI infrastructure plans," CNBC, July 27, 2026, https://www.cnbc.com/2026/07/27/nvidia-and-openai-in-talks-for-up-to-250-billion-dollar-ai-backstop.html
- Yahoo Finance Staff, "Nvidia Guarantees $250B for OpenAI So Everyone One Day Can Get Paid," Yahoo Finance, July 27, 2026, https://finance.yahoo.com/technology/ai/articles/nvidia-guarantees-250b-openai-everyone-193929851.html
- MarketScreener Staff, "Nvidia scales back $250 billion OpenAI data center guarantee, WSJ reports," MarketScreener, Aug. 14, 2026, https://www.marketscreener.com/news/nvidia-scales-back-250-billion-openai-data-center-guarantee-wsj-reports-ce7859dfda88f022
- Nvidia Newsroom, "NVIDIA Announces Financial Results for Second Quarter Fiscal 2027," Nvidia Newsroom, Aug. 26, 2026, https://nvidianews.nvidia.com/news/nvidia-announces-financial-results-for-second-quarter-fiscal-2027
- Wikipedia contributors, "OpenAI," Wikipedia, accessed Sept. 1, 2026, https://en.wikipedia.org/wiki/OpenAI
- Andy Patrizio, "Nvidia scales back financing guarantee for OpenAI data center," Network World, Aug. 21, 2026, https://www.networkworld.com/article/4212543/nvidia-scales-back-financing-guarantee-for-openai-data-center.html
- Pablo Hernández de Cos, "Artificial intelligence, growth and financial stability: challenges for central banks," Bank for International Settlements, Sept. 10, 2026, https://www.bis.org/speeches/20260910-artificial-intelligence-growth-and-financial-stability-challenges-central-banks