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Nvidia has agreed to provide a guarantee of up to $105 billion to help OpenAI lease a sprawling data center in Ohio being developed by SoftBank-owned SB Energy, in one of the chipmaker's largest infrastructure financing commitments. The Jensen Huang-led firm said on Monday it will also invest $1.5 billion in SB Energy, months after a $1 billion investment from OpenAI and SoftBank to expand data center infrastructure. The new deal is the latest example of Nvidia financing the infrastructure built around its chips, a strategy that helps drive demand but has also raised questions about ⁠circular funding flows between ⁠the chipmaker and its customers. Last week, scrutiny of such funding deepened after Nvidiapartnered with six major financial institutions including BlackRock to launch financing platforms targeting more than $500 billion in third-party funding for AI infrastructure. Huang said the new deal was not circular financing and that Nvidia is using "its scale and long-term visibility" to help. "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," Huang said. The company will be the exclusive chip provider for the facility in Pike County, Ohio, which will have a total capacity of as much as 8 gigawatts, with the first 800 megawatts expected to come online in 2028. OpenAI is leasing the site for 20 years. The financing structure is not yet defined and will include equity, people with knowledge ⁠of the matter said. The equity may include capital raised by a potential SB Energy IPO and Softbank direct investment, they said. After the total equity amount is defined, there will be a debt portion that will probably include project finance loans and potentially public debt such as bonds, the people said, asking for ⁠anonymity to disclose private discussions. LAND, POWER ARE KEY HURDLES FOR DATA CENTERS Land and power are increasingly becoming a hurdle for data centers due to the aging and strained U.S. grid and growing opposition to new construction from communities worried about higher electricity prices as well as potential water wastage. Nvidia said its guarantee covers a portion of the lease and power payments, as well as a commitment to ensure the site retains a minimum value, rather than the full cost of the project or all of OpenAI's obligations. OpenAI will pay the rent, but if it defaults, Nvidia will cover the gap between that guaranteed minimum value and whatever the owner can recoup by re-leasing or selling the site. Nvidia said it plans to selectively lock up prime sites where its chips can run for multiple generations in the future. "Investors are right to be worried about what seems to be a never-ending loop of AI deals but realistically the field of players isn't all that vast and there was always going to be a degree of circular financing," said Danni Hewson, head of financial analysis at AJ Bell. "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." Huang said the site, which would have an initial capacity of 4.25 gigawatts, could contribute as much as $200 billion to Nvidia's revenue. One gigawatt of computing power is enough electricity to power roughly 750,000 U.S. homes on average. Overall, Nvidia could make $600 billion in revenue from OpenAI by 2030 by selling it 16 gigawatts of computing power, including an expansion of the Ohio site by 3.75 gigawatts. To support the site, SoftBank and SB Energy plan to build at least 10 gigawatt of new power generation and invest $4.2 billion in new regional grid infrastructure through a partnership with AEP Ohio. The project is expected to create about 35,000 construction jobs through 2032 and about 2,500 long-term operating jobs, the ChatGPT maker said. The project has a low risk of construction delays due to local opposition, the sources added, as the state has been supportive due to the job creation and a commitment OpenAI and SoftBank commitment to fund $80 million in community projects. The project includes federal land and has the involvement of the U.S. Departments of Commerce and Energy.

On Monday, Cathie Wood-led Ark Invest executed significant trades involving NVIDIA Corp. (NASDAQ:NVDA), Advanced Micro Devices, Inc. (NASDAQ:AMD), and Palantir Technologies Inc. (NASDAQ:PLTR). The Nvidia Trade Ark Invest made substantial purchases of Nvidia shares across multiple ETFs, including ARK Blockchain & Fintech Innovation ETF (BATS:ARKF), ARK Innovation ETF (BATS:ARKK), ARK Autonomous Technology & Robotics ETF (BATS:ARKQ), ARK Next Generation Internet ETF (BATS:ARKW), and ARK Space & Defense Innovation ETF (BATS:ARKX). NVIDIA's stock closed at $225.01, and Ark's acquisition of 101,356 shares in ARKK alone translates to an investment of approximately $22.8 million. Nvidia expanded its AI infrastructure strategy by securing 4.25 gigawatts of data-center capacity in Ohio for OpenAI, with the site potentially supporting about $150 billion-$200 billion in Nvidia revenue per system generation. Separately, the companies were reportedly restructuring financing to reduce Nvidia's potential guarantee from $250 billion to less than $120 billion, while OpenAI's broader commitments could represent roughly $600 billion in the Jensen Huang-led company's computing systems through 2030. The AMD Trade Ark sold shares of Advanced Micro Devices across ARKF, ARKQ, ARKX and ARKW. AMD's stock closed at $506.00, and Ark's sale of 25,917 shares amounted to approximately $13.1 million. Tech Google is Paying $10 Million for Bankrupt Spirit Airlines' Old Emails and Spreadsheets: Here's Why Alphabet's Google agrees to buy Spirit Airlines' internal data for $10 million for product development and AI training. 3 min read Read this article AMD is currently raising up to $5 billion through a bond sale to boost its AI-related investments. This move is part of AMD's broader strategy to enhance its AI computing capabilities and manage debt maturities. The Palantir Trade Ark Invest reduced its holdings in Palantir Technologies by selling shares in ARKF. Palantir's stock closed at $172.55, and the sale of 22,023 shares equated to approximately $3.8 million. Palantir has taken a unique approach by developing software that integrates with various AI models rather than building its own. This strategy allows Palantir to benefit from the AI boom without heavy investments in AI infrastructure. Other Key Trades Benzinga Edge Stock Rankings indicate Nvidia stock has a Momentum score in the 68th percentile and Value score in the 6th percentile. Markets Nike, Meta Platforms, INVO Fertility, EyePoint Pharmaceuticals, and Micron: Why These 5 Stocks Are on Investors' Radars Today Major U.S. indices ended lower on Monday, with the Dow Jones Industrial Average falling 0.51% to 53,459.78 3 min read Read this article Photo Courtesy: ChrisStock82 on Shutterstock.com Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.