Chipmaker's payment obligations would be triggered if OpenAI becomes insolvent or fails to meet lease payments

Mucahithan Avcioglu

Nvidia agreed to provide financial guarantees of up to $105 billion for leases covering a major artificial intelligence data center campus in Ohio, according to a regulatory filing released Monday.

The chipmaker entered into multiple residual-value guarantees with SB Energy for leases covering about 4.25 gigawatts of computing capacity at the PORTS Technology Campus in Pike County.

Nvidia disclosed the agreements in a Form 8-K filed with the US Securities and Exchange Commission.

Nvidia's aggregate potential payment obligation under its initial commitment is cumulatively capped at $105 billion.

The figure represents the maximum contingent obligation under the guarantees rather than a direct investment or an immediate cash payment.

An OpenAI affiliate will be the tenant at the campus, while SB Energy will serve as the lessor, according to the filing.

Nvidia's payment obligations would be triggered if OpenAI becomes insolvent and defaults on a lease or otherwise fails to make required payments.

Under such circumstances, Nvidia would generally cover any shortfall between the guaranteed minimum value of the affected lease and the amount recovered by reletting or selling the facility.

The chipmaker could also assume the lease, require SB Energy to seek another tenant, initiate a sale process or allow the lease to be terminated.

OpenAI agreed to reimburse and indemnify Nvidia for any payments the chipmaker makes to SB Energy under the agreements.

The guarantees will generally become effective when the relevant leases commence, provided the facilities meet specified conditions and are ready for service.

Capacity is expected to begin coming online in 2028.

Nvidia's obligations could remain in effect until the 20th anniversary of each lease's commencement.

They could end earlier if OpenAI terminates the lease according to its terms, achieves a satisfactory credit rating or if other customary termination conditions are met.

Nvidia may also provide credit support for an additional 3.8 gigawatts of capacity at the Ohio campus at its sole discretion.

OpenAI will use the initial 4.25 gigawatts to deploy Nvidia's full-stack DSX AI factory platform, subject to limited exceptions.

Separately, Nvidia announced that it would invest $1.5 billion in SB Energy, joining existing investors SoftBank Group and OpenAI.

The direct equity investment is distinct from Nvidia's potential obligations under the $105 billion lease guarantees.

Nvidia said the arrangement was intended to secure the land, power and data center infrastructure required to host its AI computing systems as electricity and suitable sites become increasingly important constraints on AI expansion.

(AA)