Nvidia slashes OpenAI data center guarantee from $250B to under $120B
Nvidia dramatically reduces amount of OpenAI infra financing it may guarantee
Nvidia has scaled back its planned financial guarantee for OpenAI's massive Ohio data center project, reducing it from $250 billion to less than $120 billion, according to the Wall Street Journal. The change comes after investor concerns about Nvidia's risk exposure. The chipmaker is expected to back only the first phase of the 10-gigawatt project, developed by SoftBank's SB Energy. A deal could be signed as early as this weekend.
The change was made after investors raised concerns about Nvidia's risk exposure tied to large financing commitments.
- robotresearcher
'May guarantee' is an oxymoron I've never come across before. Mangled headline.
The article title is "Nvidia scales back funding guarantee for Ohio OpenAI data center, WSJ reports".
- nl
It's worth noting that this is deal that has never been signed previously.
There's a release from DoE about it: https://www.energy.gov/articles/fact-sheet-department-energy...
That's a horrible amount of gas energy generation.
https://www.datacenterdynamics.com/en/news/openai-in-talks-t... has more details. The whole campus build could be as much as $500B.
Would that be the most expensive single thing ever built? The ISS cost around $150B and is commonly said to be the most expensive single item, but that does include running costs.
- cmiles8
Nvidia is turning into a savings and loan company that happens to design computer chips on the side. What could possibly go wrong.
- u1hcw9nx
I would like to see the numbers.
If Nvidia sells hardware for $100B with 75% cross margin, and provides $50 billion in backstop for that same hardware, it would be still be nicely profitable deal ($25B) if the backstop capacity would be a total write-off recovering $0. Reselling that capacity in some large discount below already low backstop price would increase the profits.
It's all those pension funds, sovereign wealth funds and Softbank getting into that $500 billion deal that will be hurt.
- Taikhoom10
This is meaningless in the long run; the broader problem is the constant circular financing and "Fake profits".
It is not the first time, either; the capital cycle will prevail.
- senor_digimon
This is probably a lot more related to the fact they want to make GPUs an asset class. Nvidia is banking on the fact there will be an entire market that will guarantee whatever anyone needs.
- KurSix
The numbers have become so large that normal corporate risk management starts looking quaint
- chocolol
Ed Zitron might be right