OpenAI, SoftBank and Nvidia build in Ohio with a $105 billion guarantee

The figure that deserves attention in this deal is not the investment figure, but the guarantee figure. In filings with the SEC, the authority overseeing US markets, there appears a guarantee of up to $105 billion extended by Nvidia on conditional lease and energy-payment obligations toward SB Energy. Nvidia has also directly invested $1.5 billion in the company, citing SB Energy’s evolution into a developer of infrastructure for artificial intelligence as the rationale for the choice.

The subject of the agreement is the PORTS-Pike Technology Campus in Portsmouth, Ohio, for which OpenAI has signed a twenty-year usage contract with SB Energy — a company backed by SoftBank. According to the sources that reported on the deal, the campus stands on the site of a former nuclear facility.

The distinction between the $1.5 billion and the $105 billion is the most instructive part of the story, and it needs explaining because it is easy to confuse. The $1.5 billion is money invested. The $105 billion does not correspond to money disbursed: it is the maximum ceiling of a guarantee on conditional obligations, that is, Nvidia’s commitment to answer for lease payments and energy payments should certain conditions occur. It is not money going out today, and yet it is what makes an infrastructure of this scale sustainable for a builder: behind the payment flows to SB Energy stands Nvidia’s signature.

A $105 billion guarantee is not money paid out: it is the reason someone else agrees to pay it.

The corporate structure completes the picture. Among the investors already present in SB Energy are SoftBank and OpenAI itself. The result is a circular arrangement: OpenAI is at once a twenty-year customer of the infrastructure and a shareholder of the entity building it; Nvidia is at once the natural supplier of the processors that campus will house, an investor in the real-estate and energy company, and a guarantor of its obligations; SoftBank finances both ends of the chain. Each party appears in more than one role along the same supply chain.

It is exactly this kind of interlocking that has come under scrutiny from US authorities. The US Department of Justice is examining relations between the fund Andreessen Horowitz and several competing companies in the artificial intelligence sector: an inquiry that concerns a different set of parties than those involved in Ohio, but one that signals what is emerging as the key regulatory question for the sector today — whether cross-holdings among those who make the processors, those who build the data centers and those who train the models constitute a competition problem.

Two elements remain outside the established facts, and we flag them as such. The first is the campus’s electrical capacity, which in the sources consulted is not specified in a verifiable way. The second is the timeline for coming online: a twenty-year usage contract does not equate to a start-up date, and none of the available sources indicates when the facility will be operational.

Even regarding the guarantee, the scope of available information is limited: the documents give the maximum ceiling, $105 billion, and the conditional nature of the obligations covered — lease and power supply toward SB Energy — but the sources consulted do not specify what conditions must occur for the guarantee to be called upon, nor in what proportions over time. How much of that figure will translate into actual outlays depends on elements that are not currently public.

The public document on which the entire account rests is the SEC filing: it is there, and not in press releases, that the guarantee figure is written.

Sources: Smartphonology; Hardware Upgrade, based on filings with the SEC and public statements by Nvidia.