On Monday, Aug. 17, NVIDIA, an American technology company, officially announced it would be backing massive data center financing efforts, including up to $105 billion toward an OpenAI data center project in Ohio.
In July, media reports circulated about the company’s discussions of the possibility of the deal. Industry concerns and criticism arose about “circular financing,” a business arrangement where the investor or supplier funds their own customers.
OpenAI was NVIDIA’s first customer when they delivered its very first DGX-1 AI supercomputer to OpenAI’s offices in 2016. But their investment relationship didn’t begin until NVIDIA joined in funding rounds and massive infrastructure agreements starting in late 2024 and 2025. The NVIDIA-OpenAI deal is widely viewed by market critics as “circular financing.”
“They’re not universal, but essentially, NVIDIA is still helping to finance or backstop the biggest names that buy its chips,” Bloomberg reporter Plumpez Ed Ludlow said on Bloomberg Television in July. Ludlow shared that NVIDIA basically runs as the bank and is guaranteeing the leases, $250 billion in financing, for 10 gigawatts for this deal, but also helps OpenAI finance $350 billion worth of NVIDIA chip purchases.
A statement on NVIDIA’s website, the company says they “will be partnering with SB Energy to secure LPS capacity at the exceptional PORTS-Pike Technology Campus in Portsmouth, Ohio to host NVIDIA compute.” SB Energy, a subsidiary of SoftBank, is also a customer of NVIDIA.
The site of this massive data center will be located in southern Ohio, “owned by the U.S. Department of Energy and is expected to generate enough energy to power seven million homes,” according to the Wall Street Journal. The project will be one of the largest artificial intelligence data centers in the world by power capacity.
This development has both economical and political implications. Japan has agreed to fund the building of a $33 billion natural gas power project that will supply electricity to the massive Ohio data center. This is the direct result of a broader U.S.-Japan trade agreement in exchange for lower tariffs, with a moderated reciprocal 15% rate rather than facing a blanket 25% tariff plenty.
U.S. Commerce Secretary Howard Lutnick holds government authority in deciding which companies receive access to these vital energy resources. Companies like Anthropic, Microsoft and Alphabet have already spoken to Lutnick about the site. Japan and the U.S. will share the proceeds from power sales until Japan fully recoups its $33 billion investment, after which the U.S. will take 90% control of operations.
As AI data centers become the future, the more companies and authoritative figures want to invest in its rise. The first phase of OpenAI’s Ohio data center is expected to launch online in 2028, using 800 megawatts of power. But the full construction, which is said to be a six-year buildout, won’t be completed until 2032.
Whether after revenue growth or cost control, the NVIDIA-OpenAI deal is just the beginning. In April, Amazon agreed to invest up to an additional $25 billion in Anthropic. In return Anthropic committed to purchasing Amazon’s cloud technology in a $100 billion deal over the next 10 years.
In addition, Alphabet announced a historic equity to finance AI infrastructure in June, while Meta announced plans in July to expand a Louisiana data center to five gigawatts. Meta’s total planned investment exceeds $50 billion.
Featured image: Photo by İsmail Enes Ayhan on Unsplash
Edited by James Sutton
