Nvidia to team with Wall Street on US$500 billion package for AI infrastructure projects

Lead

Nvidia is in discussions with a group of major US investment firms to provide $500 billion in funding for artificial intelligence infrastructure projects, according to a report in the Financial Times. The deal, which could be announced as soon as Monday, would involve firms such as Apollo Global Management, Blackstone, BlackRock’s Global Infrastructure Partners, Brookfield Asset Management, Goldman Sachs and KKR, the report said, citing unidentified sources. Nvidia did not immediately respond to a request for comment, and the named firms also did not respond, according to the report.

Coverage comparison

The reports about the potential deal come from different sources, each highlighting different aspects of the story. The South China Morning Post reported that Nvidia is in talks with US investment giants to invest $500 billion in AI infrastructure projects, adding that the deal may be announced as soon as Monday. The report noted that Nvidia has already signed hundreds of billions of dollars worth of deals with companies across the AI ecosystem.

Deutsche Welle focused on the scale of Nvidia’s investment, specifically in the OpenAI data center project, and highlighted the potential risks of a “circular” financing system in the AI industry. Al Jazeera’s reporting added details about the project in Ohio and the power supply arrangement, as well as analyst concerns about circular financing.

The Financial Times report did not detail which projects or companies the funding would back, the nature of the funding, or whether the $500 billion represented new commitments or already existing ones, according to the South China Morning Post report.

Key claims

The reports claim that Nvidia is in talks to provide $250 billion in financial guarantees to OpenAI for a data center project in Ohio. The project is said to be a 10-gigawatt facility built by SB Energy, a subsidiary of SoftBank, in Piketon, Ohio, according to Al Jazeera. The project could cost more than $500 billion, including the chips that would go inside the data center, and is expected to deliver as much as 800 megawatts of electricity by 2028.

The power supply for the project would come from a separate $33 billion US government deal with Japan for a natural gas plant, according to Al Jazeera. The $250 billion guarantee covers the lease for the center but does not cover the chips, which are worth another $350 billion. Nvidia has said it is also in talks for that as well, according to the report.

Nvidia has invested heavily in multiple AI start-ups, including OpenAI and Mistral, and has also begun to invest in “neocloud” providers such as CoreWeave and Nebius, according to Al Jazeera’s report.

Analysts have raised concerns about the risks of a “circular” financing system at the core of the AI ecosystem, where a company pays another for a product or deal, and then that company buys back goods or services from the first company. This pattern is seen across many AI deals, including the OpenAI-Microsoft relationship, as reported by Deutsche Welle.

The reports also noted that New York has become the first US state to officially put a one-year moratorium on new data center construction, according to one of the reports.

Perspectives

Analysts on circular financing risks: Both Al Jazeera and Deutsche Welle quoted analysts who expressed concerns about the risks of a “circular” financing system. Gary Tan, portfolio manager at Allspring Global Investments, told Deutsche Welle that the interconnected nature of the AI ecosystem is real, but near-term risks are mitigated by the strong balance sheets and cash flows of major providers. Jan Frederik Slijkerman, a tech sector strategist at ING, said he does not see a systemic industry-wide risk arising from the observed interdependencies.

Company silence: The named investment firms did not respond to requests for comment from the Financial Times, and Nvidia did not immediately respond to a request for comment, as reported.