Nvidia has apparently decided that if you're going to sell someone all the shovels, you might as well cosign their mortgage on the gold mine too. The chipmaker is reportedly in talks to backstop up to $250 billion so OpenAI can lease space in a data center campus roughly the size of a small nuclear power grid.

A Quarter-Trillion-Dollar Handshake

Nvidia is in early talks to guarantee financing for OpenAI's lease of a planned 10-gigawatt data center campus that SoftBank's energy arm is building in southern Ohio — on the site of a former uranium enrichment plant, because subtlety is dead. The full project, buildings and chips included, could run past $500 billion, with Nvidia separately weighing another $350 billion in financing just for the GPUs going inside it.

The catch: OpenAI doesn't have an investment-grade credit rating, so it needs a deep-pocketed co-signer to unlock favorable loan terms. Nvidia, whose GPUs are the entire reason OpenAI needs the building in the first place, seems happy to oblige. The first phase is targeted for 2028.

The Circular Financing Merry-Go-Round

Here's what's making investors twitchy: Nvidia sells chips to OpenAI, may finance OpenAI's purchase of those very chips, and now might guarantee the debt on the building that houses them. That's not a supply chain — it's an ouroboros with a stock ticker.

Michael Burry — yes, that Michael Burry — reportedly summed it up as "around and around we go," which is the finance-bro version of a horror movie's ambient dread sting. None of this proves the AI boom is fake, but it does mean the money underwriting it is getting harder to trace back to an actual customer paying actual cash for actual output.

When the guy who shorted the housing market before 2008 side-eyes your funding structure, it might be time to read the fine print.

Source: Yahoo Finance