Nvidia Reportedly Considering Loan Guarantees for OpenAI’s $100 Billion Data Center Expansion

Nvidia’s Potential Financial Backing for OpenAI

Nvidia is reportedly in talks to guarantee a portion of the loans that OpenAI plans to secure for building its own data centers, according to sources familiar with the matter. The potential arrangement, first reported by The Wall Street Journal, could leave the chipmaker with billions of dollars in debt obligations if OpenAI encounters financial difficulties and cannot repay the loans.

Nvidia’s Potential Financial Backing for OpenAI
Substantial Chip Deployment Plans
Competitive Pressure and Strategic Moves
Nvidia’s Broader Investment Strategy

The discussions are part of a broader $100 billion investment pledge between the two AI industry leaders, sources indicate. This massive financial commitment underscores the enormous capital requirements for building next-generation AI infrastructure capable of supporting increasingly sophisticated artificial intelligence models.

Substantial Chip Deployment Plans

According to the report, OpenAI signed a letter of intent with Nvidia in September to deploy at least 10GW of the company’s systems in its data centers. This ambitious deployment could involve Nvidia leasing up to five million chips to OpenAI, which analysts suggest could represent a $350 billion commitment at current market prices.

Simultaneously, Nvidia has committed to invest up to $100 billion in OpenAI as the new systems are deployed, effectively helping to fund the substantial chip order. The timing of these negotiations appears significant, with reports indicating that talks between the companies initially gained momentum following OpenAI’s January announcement of a $500 billion Stargate data center joint venture with SoftBank.

Competitive Pressure and Strategic Moves

Industry analysts suggest that competitive pressures may have influenced Nvidia’s renewed engagement with OpenAI. Reports indicate that discussions between the two companies had initially stalled before a June report from The Information revealed that OpenAI had begun using Google’s TPU chips, potentially prompting Nvidia to return to negotiations.

Despite the substantial commitment to Nvidia’s technology, OpenAI has continued diversifying its compute infrastructure, according to industry observers. Just weeks after the Nvidia agreement, OpenAI signed a 6GW deal with AMD that could potentially give the AI company a ten percent stake in the chip designer.

Further demonstrating its multi-vendor strategy, OpenAI officially unveiled its custom AI hardware project with Broadcom a week later, announcing plans to deploy up to 10GW by 2029., according to market trends

Nvidia’s Broader Investment Strategy

Market analysts note that Nvidia has been pursuing multiple strategic investments to maintain demand for its chips across the AI ecosystem. The company has invested in several cloud computing providers including together.ai, Nscale, Lambda, Nebius, CoreWeave, Crusoe, and Firmus.

In many of these arrangements, Nvidia reportedly rents back a portion of the GPUs it sells to these companies, creating additional revenue streams while ensuring consistent demand. Most notably, with CoreWeave, Nvidia announced it would purchase any of the company’s unsold GPU capacity until 2032, effectively guaranteeing utilization of its hardware.

The potential loan guarantee arrangement with OpenAI represents another strategic move by Nvidia to secure its position in the rapidly evolving AI infrastructure market, though it introduces significant financial exposure that market watchers will be monitoring closely as details emerge.