Circular Financing in the AI World: How Nvidia Could Guarantee $250 Billion for OpenAI—and What It Means for the Entire Industry

he Most Expensive Guarantee in History: A Scale That Is Difficult to Imagine

Monday began with news that would have sounded like science fiction only a few years ago. NVDA ... —the chipmaker whose technology has become indispensable to virtually every major artificial intelligence project—is reportedly in talks to provide OpenAI with a financial guarantee worth approximately $250 billion. This is not merely a large transaction; it could become one of the most ambitious financial arrangements in the history of the technology industry.

Should the agreement be finalized, the financing would allow OpenAI to lease an enormous 10-gigawatt data center that SoftBank is building in southern Ohio. For comparison, 10 gigawatts is enough electricity to power several million homes. The total cost of the project is estimated to exceed $500 billion, including the Nvidia chips that would be installed inside the data center.

However, the most remarkable aspect of this story is not simply the astronomical figures but the structure of the proposed deal itself. Nvidia would not provide the money directly to OpenAI. Instead, it would act as a guarantor, effectively backing OpenAI’s obligations to lenders.

As a privately held company that is not yet profitable, OpenAI does not have an investment-grade credit rating. This makes it extremely difficult for the company to secure massive loans on favorable terms. Nvidia’s guarantee would reduce the risks faced by banks and other lenders, allowing them to finance the construction project at lower interest rates.

At the same time, the guarantee would cover only the construction and leasing of the data center—not the purchase of Nvidia’s chips. A separate agreement for the processors could reportedly be worth as much as $350 billion.

The result resembles a circular financing arrangement: Nvidia guarantees the funding for OpenAI’s infrastructure, while OpenAI uses that infrastructure funding to purchase chips from Nvidia. In effect, a significant portion of the money flows back to the guarantor, increasing its reported sales without necessarily introducing an equivalent amount of fundamentally new capital into the system.

Why the Deal Benefits Everyone: Nvidia, OpenAI, SoftBank, and Even the US Government

For Nvidia, the arrangement could be a brilliant strategic move. The company would not merely sell chips; it would secure demand for its products for many years to come.

OpenAI currently relies on computing capacity rented from MSFT ... , AMZN ... , and Oracle. By gaining access to dedicated infrastructure, the company could reduce its dependence on external cloud providers. For Nvidia, however, the key advantage is that the project would require such an enormous number of processors that long-term demand for its hardware would be effectively guaranteed. In a world where companies are competing for a limited supply of advanced GPUs, that certainty is extremely valuable.

For OpenAI, the project offers an opportunity to escape its dependence on rented computing infrastructure. The company currently pays enormous amounts to cloud providers for access to computing capacity. A dedicated data center in Ohio would give OpenAI greater control over its infrastructure, potentially reduce its long-term operating costs, and strengthen its credit profile through Nvidia’s financial backing.

The deal is equally important for SoftBank, which is developing the massive campus through its energy subsidiary. A financial guarantee from Nvidia, combined with a tenant of OpenAI’s scale, would allow SFBQF ... to obtain debt financing on significantly more favorable terms. Without such a powerful anchor tenant and guarantor, a 10-gigawatt project would be almost impossible to execute.

There is also a third major participant in this story: the US government. The Ohio project is located on federal land, and the allocation of power capacity is reportedly being overseen personally by US Commerce Secretary Howard Lutnick.

Moreover, under a recent trade agreement, Japan has committed to investing $33 billion in the construction of a natural-gas power plant that would supply electricity to the data center. The Trump administration is therefore using a combination of private investment and international agreements to accelerate the development of strategically important AI infrastructure within the United States, bypassing many of the usual bureaucratic obstacles.

Skeptics and Risks: Why the Deal Is Raising Questions

Despite its scale and ambition, the initiative has attracted both criticism and concern. One of the most prominent skeptical voices is investor Michael Burry, who became famous for predicting the 2008 mortgage crisis.

Burry reportedly responded to the news on social media by writing, “Around and around we go,” while increasing his short position against Nvidia shares.

Burry and other skeptics argue that arrangements of this kind—where a manufacturer provides financial guarantees that ultimately generate purchases of its own products—can create the illusion of organic demand.

Should market conditions change, interest in AI projects decline, or OpenAI encounter financial difficulties, the entire complex structure could begin to unravel. Nvidia could be left responsible for enormous financial obligations, while its reported performance could prove to have been inflated by transactions that did not bring substantial new external capital into the system.

Furthermore, the negotiations are reportedly still at an early stage. According to The Wall Street Journal, the terms have not yet been finalized, and the deal could collapse at any time.

Should that happen, OpenAI would need to find alternative sources of financing, while SoftBank would need to identify other options for a data center that has already been presented as the largest in the world. OpenAI’s competitors—including Anthropic, Microsoft, and GOOGL ... —have reportedly also expressed interest in the same facility, adding another layer of intrigue to the situation.

The Broader Trend: How the AI Boom Is Being Financed

This story is not an isolated case. It reflects a much broader trend across the artificial intelligence industry.

Spending on AI infrastructure is forecast to exceed $700 billion this year. Technology giants are increasingly using their balance sheets as a “credit wrapper,” helping younger companies borrow money to finance infrastructure projects. This practice is rapidly becoming a new standard in AI infrastructure financing.

When companies such as Google guarantee data-center leases for Anthropic, they are not simply assisting a customer. They are also creating demand for their own chips, cloud services, and technologies.

This produces an interconnected financial system in which the success of one participant increasingly depends on the success of another. In the case of Nvidia and OpenAI, that relationship could become even tighter.

Conclusion: A Bet on the Future or a Bubble?

The proposed Nvidia–OpenAI transaction is undoubtedly a massive bet on artificial intelligence becoming one of the primary driving forces of the global economy over the coming decades.

The involvement of the US government and international investors such as Japan demonstrates that AI infrastructure is no longer viewed purely as a commercial opportunity. It is increasingly regarded as a matter of national security, technological leadership, and economic competitiveness.

However, the enormous amounts involved and the complexity of the financing structures also create considerable risks. Should economic conditions deteriorate or returns on AI investment prove lower than expected, these projects could become a serious financial burden for everyone involved.

For now, the market appears to believe in the continued growth narrative: Nvidia shares remain among the most highly valued in the world. Nevertheless, skeptics such as Michael Burry serve as a reminder that excessive optimism and complicated financial arrangements have often preceded major market corrections.

In any case, the negotiations between Nvidia and OpenAI represent an important signal. They demonstrate that financial engineering in the technology industry is entering an entirely new era and that the amount of capital being deployed in the race for AI dominance is comparable to the annual budgets of entire countries.

The development of this project deserves attention not only from investors but from anyone trying to understand what the world may look like five or ten years from now—a world in which computing power is no longer merely a scarce resource but the foundation of a new global economy.