2 weeks ago
Nvidia backs OpenAI's Ohio data centre with $105 billion guarantee
Nvidia makes special computer chips that help power artificial intelligence.
OpenAI is a company that builds AI programs and wants to build a huge computer building in Ohio.
Nvidia has promised to help pay up to $105 billion if something goes wrong with the building's lease.
This promise helps OpenAI rent the building from SB Energy, a company owned by SoftBank.
Nvidia is also giving $1.5 billion to SB Energy to help build the site.
Some people worry that Nvidia is lending money to customers who buy its own chips.
Nvidia's boss, Jensen Huang, says the deal is a good way to support AI factories.
The project could create about 35,000 construction jobs and 2,500 long-term jobs.
Nvidia thinks it could earn up to $600 billion from OpenAI by 2030.
Nvidia has agreed to provide a guarantee of up to $105 billion to help OpenAI lease a data centre in Ohio developed by SoftBank-owned SB Energy.
Nvidia will also invest $1.5 billion in SB Energy, months after a $1 billion investment from OpenAI and SoftBank.
Nvidia CEO Jensen Huang rejected suggestions of circular financing, saying the company is leveraging its scale and long-term visibility.
The Ohio site will initially have 4.25 gigawatts of capacity and could contribute as much as $200 billion in revenue for Nvidia.
Nvidia expects to generate up to $600 billion in revenue from OpenAI by 2030 by supplying 16 gigawatts of computing power.
- Who
- Nvidia, OpenAI, SoftBank-owned SB Energy, and Nvidia CEO Jensen Huang
- What
- Nvidia agreed to provide a guarantee of up to $105 billion to help OpenAI lease a data centre in Ohio and will invest $1.5 billion in SB Energy.
- Where
- Ohio, United States
- When
- The company announced the deal on Monday.
- Why
- To secure long-lived infrastructure for Nvidia compute so OpenAI can deploy AI factories, while stimulating demand for Nvidia's chips.
Critics
Nvidia
Circular financing
Critics
Critics raise concerns over potential circular funding flows between Nvidia and its customers, which could increase funding risks.
Nvidia
Nvidia CEO Jensen Huang rejected the suggestion, saying the company is leveraging its scale and long-term visibility to support the investment.
Long-term returns
Critics
The biggest test is whether these investments ultimately generate decent returns for all those laying out cash, which can only be figured out further down the line.
Nvidia
Nvidia expects the Ohio site to contribute as much as $200 billion in revenue and up to $600 billion from OpenAI by 2030.
Data centre expansion
Critics
Land and power are hurdles for data centre development amid an ageing US power grid and community opposition over electricity prices and water wastage.
Nvidia
SoftBank and SB Energy plan to build at least 10 gigawatts of new power generation and invest $4.2 billion in regional grid infrastructure with AEP Ohio.
Key facts
- Guarantee amount
- Up to $105 billion
- Nvidia investment in SB Energy
- $1.5 billion
- Initial Ohio site capacity
- 4.25 gigawatts
- Projected Nvidia revenue from OpenAI by 2030
- Up to $600 billion
- Planned Ohio expansion
- 3.75 gigawatts
- New power generation planned
- At least 10 gigawatts
- Grid infrastructure investment
- $4.2 billion with AEP Ohio
- Jobs expected
- About 35,000 construction jobs through 2032 and 2,500 operating jobs
Quotes
Jensen Huang
CEO of Nvidia
“We are securing long‑lived infrastructure for Nvidia compute so OpenAI can deploy the most productive AI factories that can be upgraded repeatedly with each new generation delivering more intelligence and better economics.”
firstpost.com
“The biggest test is whether these investments ultimately generate decent returns for all those laying out cash and that’s something that can only be figured out further down the line.”
firstpost.com
Sources
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