$50 Billion, 20-Year Lease: OpenAI Negotiates 10-GW Data Center in Ohio; NVIDIA to Serve as Credit “Backstop”

Author: Ada, TechFlow

OpenAI’s capital structure for compute infrastructure is being rewritten.

According to a June 10 report by The Information, OpenAI is in advanced negotiations with SB Energy—a subsidiary of SoftBank Group—over a major lease agreement for a planned AI data center campus on federal land in Pike County, southern Ohio. The campus is slated to have a total capacity of 10 gigawatts (GW). It was previously announced jointly by the U.S. Department of Energy (DOE) and the Department of Commerce (DOC) under a “public-private partnership” framework, and will be built on the former Portsmouth Gaseous Diffusion Plant site—a Cold War-era facility that produced weapons-grade uranium and ceased operations in 2001.

Per terms disclosed by The Information, OpenAI will sign a 20-year lease with SB Energy, granting OpenAI exclusive rights to use equipment within the campus during the lease term and obligating it to pay rent upon commencement of operations—estimated to total tens of billions of dollars cumulatively. The first phase, with 800 megawatts (MW) of capacity, is expected to come online in 2028.

NVIDIA Enters as Credit Guarantor—Structural Financing Spreads Beyond Cloud Providers

The most critical—and previously undisclosed—element of this deal is NVIDIA’s role. According to The Information, NVIDIA is discussing using its own balance sheet to provide credit guarantees covering both OpenAI’s lease payments and SB Energy’s future project financing. This would mark NVIDIA’s first entry as a “financial guarantor” into an infrastructure project of this scale; previously, its collaboration with OpenAI had been limited to equity investment and structured lease financing.

This model is not isolated. In an exclusive Bloomberg report dated June 9, it was revealed that Google is effectively backstopping Anthropic’s approximately $35 billion TPU leasing obligations across five data centers located in New York, Texas, Louisiana, and Indiana. The transaction is supported by structured debt issued through a special-purpose vehicle (SPV) led by Apollo and Blackstone, while Broadcom provides residual value guarantees on the senior tranche. SemiAnalysis has dubbed this arrangement “hyperscaler-backed financing,” arguing it addresses the duration mismatch inherent in data center economics—where leases typically span 15+ years, yet payback periods are only around eight years.

NVIDIA’s involvement signals that such structures are now expanding beyond cloud providers to include chip suppliers.

$50 Billion Campus Backed by DOE Land & U.S.–Japan Investment Agreement

The lessee, SB Energy, is an energy company founded by SoftBank in 2019 and majority-owned by SoftBank, with Ares Management and OpenAI also holding minority stakes. In January this year, OpenAI and SoftBank each injected $500 million into SB Energy (totaling $1 billion), and concurrently assigned SB Energy responsibility for constructing OpenAI’s 1.2 GW “Stargate” project in Milam County, Texas.

The government relations backdrop is especially pivotal. As disclosed by the U.S. Department of Commerce in February, SB Energy’s investment stems from the Trump administration’s trade agreement framework with Japan, under which Japan pledged $550 billion in U.S. investments—including SB Energy’s $33 billion power plant project at the Portsmouth site. In early May, U.S. Energy Secretary Chris Wright, Commerce Secretary Howard Lutnick, and Interior Secretary Doug Burgum joined SoftBank representatives in Piketon for the official project announcement.

Under the plan, SB Energy will self-fund construction of a 9.2 GW natural gas power generation facility (with ownership vested in the U.S. government and SB Energy responsible for operations), and jointly invest $4.2 billion with AEP Ohio to upgrade the local grid infrastructure. Upon completion, the campus’s total 10 GW capacity will be equivalent to roughly 4.5 Hoover Dams—potentially making it the world’s largest single-site data center campus.

$35 Billion Chip Shortfall: OpenAI Fills Infrastructure Gaps Incrementally

Merely securing the campus site is insufficient. Industry consensus holds that chips and servers account for roughly 70% of total AI data center costs; just this component alone would require OpenAI to raise approximately $35 billion to procure NVIDIA chips for this project. According to The Information, OpenAI is already exploring dedicated financing mechanisms specifically for this chip procurement.

This reflects a strategic pivot in OpenAI’s infrastructure planning. Earlier this year, the $50 billion “Stargate” joint venture initiative—announced jointly by OpenAI, Oracle, and SoftBank—was confirmed by industry sources to have been effectively shelved mid-year; the Financial Times reported that OpenAI had “de facto abandoned the joint venture model” in favor of bilateral large-scale contracts to advance its proprietary compute infrastructure. The current 20-year SB Energy lease represents the largest manifestation of this new approach.

$66.5 Billion in Cloud Leasing Obligations Will Be Scrutinized in IPO Filing

This past Monday (June 8), OpenAI confirmed it had confidentially filed its IPO prospectus (Form S-1) with the U.S. Securities and Exchange Commission (SEC). Per reports by CNBC and Reuters, the underwriting syndicate includes Goldman Sachs, Morgan Stanley, and JPMorgan Chase, with a potential valuation exceeding $100 billion and a target listing date as early as September. Multiple outlets—including Bloomberg—cited internal documents projecting OpenAI will post approximately $14 billion in losses in 2026 and will not achieve profitability until at least 2029.

In this context, OpenAI’s cumulative cloud leasing commitments—$25 billion in incremental capacity with Microsoft, $30 billion over five years with Oracle, and $10 billion over eight years with AWS (including the original $3.8 billion)—totaling at least $66.5 billion, will become central points of scrutiny for the SEC and institutional investor due diligence. OpenAI CFO Sarah Friar reportedly acknowledged internally in April that if revenue growth falls short of expectations, the company may be unable to fulfill its future compute contracts.

Meanwhile, SB Energy itself announced in May its intention to pursue a U.S. IPO, with an underwriting syndicate comprising JPMorgan Chase, Goldman Sachs, Morgan Stanley, Citigroup, and Mizuho, targeting a valuation above $50 billion and a potential listing as early as September. This implies a tripartite dynamic among OpenAI, SB Energy, and upstream supplier NVIDIA—where each party’s prospectus will expose the others’ risk exposures, adding a new chapter to the “circular financing” narrative.