Nvidia is in talks to provide $250bn in funding guarantees for OpenAI to lease a massive data center in Piketon, Ohio—a 10-gigawatt project from SoftBank’s SB Energy. The total bill could exceed $500bn once the chips inside are counted, with 800 megawatts of power expected by 2028. The electricity comes from a separate $33bn U.S.-Japan natural gas plant deal. The guarantee covers the lease, not the chips, though Nvidia says it’s also discussing those.

This marks a shift for OpenAI, which has historically rented from Amazon, Oracle, and Microsoft. But critics call it circular financing. Boston College’s Aleksandar Tomic says the deal lets OpenAI buy Nvidia chips with Nvidia’s own money—when OpenAI itself is unprofitable and its partners hold $96bn in debt. He compares it to the dot-com bubble, where companies bought from each other to inflate demand. Nvidia shares dipped 4.9% on the news, though they’ve risen 908% over five years.

Political backlash is also building. New York became the first state to impose a one-year moratorium on new data center construction. Utah’s state senate president lost a primary after backing a data center project. Texas’s governor called for a ban in rural areas, and a Texas Democrat proposed ending tax breaks for the state’s 466 centers. Still, Founder’s ETF’s Michael Monaghan suggests the criticism is overblown—it’s just how an economy works, and completed projects rarely get undone. Neither Nvidia nor OpenAI commented on the report.

Source: Al Jazeera