Not good at all.
From the Wall Street Journal, July 26:
Project would be one of the largest AI computing hubs and involve power controlled by the U.S. government
Nvidia NVDA -0.92% is in talks to provide a roughly $250 billion backstop for OpenAI as part of a massive data-center project, one of the most ambitious financial transactions yet in America’s artificial-intelligence boom.
The guarantees from Nvidia would help the ChatGPT maker lease a 10-gigawatt project that SoftBank’s 9434 2.48% energy subsidiary is developing in southern Ohio, people familiar with the matter said.
In total, the project could cost more than $500 billion, including the chips that would go inside the data centers. It would be the largest data center project announced to date.
The power for the project is controlled by the U.S. government and funded separately by Japan under a recent trade deal. Commerce Secretary Howard Lutnick is involved in deciding who will get the power, some of the people said.
Nvidia’s backing would allow the data center developer, which is owned by Japanese billionaire Masayoshi Son’s investment firm SoftBank, to raise debt at more favorable terms than it could if OpenAI had no financial backer, since OpenAI has no investment-grade credit rating as an unprofitable private company. The AI company has been in advanced talks to lease the site for several weeks, people familiar with the matter said.
OpenAI is among the companies that has shown most interest in the site, while Anthropic, Microsoft and Google have also spoken to Lutnick about it in recent weeks, one of the people said.
AI companies are desperate to secure chips and power needed to run their models, making megaprojects that have government support or guaranteed power increasingly attractive.
Under the arrangement, Nvidia would guarantee a series of financing vehicles intended to make lenders feel more confident that the funding behind the project is secure, the people said. Terms haven’t been finalized and the deal could fall apart.
The $250 billion guarantee would cover the data center lease and debt needed to fund its build out, but not the Nvidia chips that would go inside it. Nvidia, which has invested $30 billion in OpenAI, is also discussing a deal to finance the chip purchase for OpenAI, which could total $350 billion, people familiar with those discussions said. Such circular funding arrangements have caused concerns that the industry is vulnerable if investor sentiment shifts or growth slows for AI companies....
....MUCH MORE
The quarter-trillion guarantee would be risky no matter who NVDA was co-signing for but the fact it will be for Mayoshi Son and Sam Altman is nuts.
Our last mention of the Ohio property was February 25's Transmission: "Central Ohio Set for Major Grid Expansion as PJM Approves 765-kV Lines"
We didn't get any further information on the immense Ohio natural gas power plant in last night's State of the Union message but as a possible consolation prize for the hyper-concentrated mini-portfolio we see this from Construction Review, February 17...
Preceded by Feb 24's "Ahead of Tonight's State Of The Union: Hoping For Clarity On The Gigantic Gas-Fired Electrical Generation Plant
Everything other than the fact it is Japanese money funding the beast and a Japanese company (SB Energy sub. of SoftBank) overseeing the project and Japanese companies expressing interest in developing same, a mention of American corporate participation could be rocket fuel for a couple of our favorite names.
First up, Barron's last week, with the overview...***...9.2 gigwatts would make it the second largest electrical plant of it's type in the world.
Both Mitsubishi Electric and Hitachi manufacture utility-scale natural gas turbine generators but if there is room for an American company it would have to be GE Vernova.
Plus transformers and transmission lines and Quanta Services is the go-to.
October 2025 - "...Ohio lawmaker proposes ban on marriage, legal personhood for AI"
Getting in front of the curve....
August 2025 - Follow-up: SoftBank Was Purchaser Of Foxconn Ohio Plant; From Here It Gets Interesting
Following on August 16's "Foxconn says EV sales are so slow it's converting a factory to build AI servers instead".
July 2025 - "SoftBank and OpenAI’s $500 Billion AI Project Struggles to Get Off Ground"
I'm starting to think the manufacturing wizards at TSMC were right:
Chips: "TSMC execs allegedly dismissed Sam Altman as ‘podcasting bro’ — OpenAI CEO made absurd requests for 36 fabs for $7 trillion"
The least they could have done is invite GE Vernova to participate in what will be the world's second-largest natural gas-fired power plant but noooo.
