OpenAI has signed a 20-year lease for the 'PORTS-Pike' campus in Ohio, securing around 8 gigawatts of IT capacity from SB Energy, a subsidiary of SoftBank. The project, which includes cooling and infrastructure, is expected to reach a total of 10 gigawatts. Nvidia is backing the initiative with up to $105 billion, becoming the exclusive chip supplier for the first half of the site. The deal marks a significant expansion in OpenAI's infrastructure efforts, highlighting the growing demand for data center capacity in the AI industry.
Nvidia CEO Jensen Huang has identified 'LPS'—land, power, and shell—as the next strategic resource in the AI buildout, emphasizing that these factors have become the primary bottleneck. The arrangement involves Nvidia backing the residual value of the first construction phase, covering 4.25 gigawatts of IT capacity. If OpenAI exits the lease, SB Energy must find a replacement tenant and sell the facilities before Nvidia covers the difference, capped at $105 billion. In return, Nvidia gains exclusive chip supply rights for the site and is investing $1.5 billion in SB Energy.
The Wall Street Journal reports that major tech companies hold around $3 trillion in AI commitments off their balance sheets, with leases only recorded once payments begin. This includes $1.2 trillion in unstarted leases, a fourfold increase from a year earlier. Analysts warn that investors struggle to gauge these companies' actual debt levels, as contracts are nearly impossible to cancel. The WSJ also notes that Nvidia initially wanted to guarantee the entire project with around $250 billion but scaled back the commitment after a 5 percent stock drop and investor pressure. The final $105 billion cap only covers asset value, not the full lease.
Source: thedecoder
