Nvidia Explores Major Deals with OpenAI, Reigniting Concerns Over Circular AI Financing
Nvidia is reportedly considering a $250 billion guarantee for an Ohio data center to support OpenAI and may also finance the purchase of $350 billion in Nvidia chips by the ChatGPT developer. The potential deals have raised concerns about circular financing within the AI sector, where companies mutually benefit but could create systemic financial risks if one party falters. The news led to a 4.5% drop in Nvidia's stock price and increased volatility in credit default swaps for its bonds, signaling investor unease over these interdependent arrangements. The data center project is being developed by SoftBank through an Ohio-based entity on federal land with power supplied from a new Japanese natural gas plant. Nvidia also announced plans to invest in Safe Superintelligence, co-founded by OpenAI’s Ilya Sutskever, further expanding its influence and collaboration within the AI ecosystem.