Nvidia and OpenAI are in talks over an arrangement that would put the chipmaker's balance sheet behind OpenAI's building spree, according to CNBC, which reports a backstop worth up to $250 billion. The structure is unusual: rather than writing a check, Nvidia would lend its credit standing so OpenAI can borrow money for a data center campus in Pike County, Ohio.
The scale is enormous. Forbes has asked whether OpenAI's $500 billion data center project would be the world's largest. Financial Express describes the Ohio site as a "nuclear-adjacent" mega-project, and separately, the Gwinnett Daily Post reports OpenAI plans a massive data center near Savannah, Georgia.
Markets did not take the news as good news. A Wall Street Journal report on the financing plan triggered a broad selloff across AI hardware names, according to 247wallst.com, and Nvidia shares fell Monday ahead of a run of Magnificent Seven earnings, per coverage on MSN. Bloomberg reports that Nvidia's perceived credit risk jumped in the swaps market — where investors buy protection against a company defaulting — on reports of the deal talks.
The worry has a name. Yahoo Finance says the arrangement "reignites 'circular' AI concerns": the fear that Nvidia is effectively helping to fund the customers who then buy its chips, making demand look stronger than it independently is. Reuters Breakingviews, in a column also carried by TradingView, frames it bluntly, arguing that "cloudmaxxing" is pulling Nvidia into a dangerous game.
Why it matters: if the most valuable company in the AI boom starts underwriting its own customers' borrowing, the industry's growth story and its credit risk become the same story — and investors are signaling they've noticed.