A residual value guarantee is a promise about an object, not about a tenant. Someone builds a thing. Someone else rents it. A third party promises the thing itself will still be worth a set amount. If the renter walks, the owner relets or sells. The guarantor covers only the shortfall. It is the structure behind a car lease. It now underpins the largest data centre project yet announced.
Nvidia confirmed the arrangement on Monday. It has secured land, power and shell capacity at the PORTS-Pike Technology Campus in Pike County, southern Ohio. SB Energy will build, own and operate the campus. OpenAI has signed a 20-year lease as the customer. The initial phase covers 4.25 IT-gigawatts, and Nvidia holds an option on the remaining 3.75.
“Now is the time to scale the AI infrastructure that will power the next industrial revolution,” said Jensen Huang, Nvidia’s founder and chief executive.
What Nvidia actually promised
The Wall Street Journal reported the terms first, in a piece by Anissa Gardizy. Nvidia backs the value of the completed data centres rather than the rent. In return it becomes the exclusive chip provider for the first half of the site and takes an equity stake in SB Energy. It can extend the commitment to the full campus later.
The mechanics sit in a filing Nvidia made on Monday. Payment is triggered only if OpenAI defaults on a lease or becomes insolvent. Several things must happen before that reaches Nvidia. SB Energy has to try to relet the site at the same price. If that fails, it has to try to sell. Only the remaining shortfall is Nvidia’s, and the cumulative obligation is capped at $105bn.
Nvidia also picks the remedy. It can assume the lease, force a reletting, start a sale, allow termination, or defer for up to a year while covering project costs. The guarantee attaches to finished buildings, not to anything under construction. It expires three ways: if OpenAI wins a satisfactory credit rating, if OpenAI ends a lease on its own terms, or 20 years after each lease begins.
One clause sits further down. OpenAI has agreed to reimburse and indemnify Nvidia for any amount Nvidia actually pays out. The company being backstopped has promised to repay the backstop. That is worth less than it sounds, because a claim against an insolvent OpenAI would not be worth much. It does show what the structure is: a bridge, not a subsidy.
The number that fell, and the one that was halved
In late July the Journal reported that Nvidia was discussing a guarantee across all 10 gigawatts, worth roughly $250bn. Nvidia shares fell 5%. By Friday the company had halved that promise, and the filed figure is lower again. Size is the part everyone counted. The instrument is the part that changed.
The Information reported on Saturday that Nvidia was weighing as much as $3bn in SB Energy, split in two: half on signing, half at the developer’s flotation. Reuters carried the report the same day. Nvidia has now confirmed $1.5bn, which is the first half. SB Energy is working with bankers on a listing as soon as next month.
Nvidia earns from the site either way. It plans to sell hundreds of billions of dollars of chips into the initial phase, according to people familiar with the deal. That is the circularity its critics keep naming. It struck a similar arrangement with six finance giants last week, and Google did the same for Anthropic in July.
9.2 gigawatts of gas on a uranium site
The campus is a reindustrialisation of the Portsmouth Gaseous Diffusion Plant, a Cold War uranium enrichment site. It spans private land and federal land leased from the Department of Energy. SB Energy and SoftBank plan at least 10 gigawatts of new generation, including 9.2 gigawatts of natural gas. The gas plant is owned by the US government and financed by Japan under a recent trade deal.
Power is the part local residents will feel. SB Energy and AEP Ohio will spend at least $4.2bn on new transmission, including 765-kilovolt lines and four substations. OpenAI says the project pays those costs itself and will not shift them onto Ohio ratepayers. It says cooling runs closed-loop and air-cooled, with ongoing water use comparable to an office building. Those are the company’s own published commitments.
The job figures have grown between documents. A Department of Energy fact sheet in March projected more than 10,000 construction jobs over four years, and more than 2,000 operating roles. OpenAI now says 35,000 construction jobs across a six-year buildout to 2032, and 2,500 long-term operating jobs. The buildout window lengthened between the two. OpenAI has promised an annual public report on hiring, water and energy use.
“This is going to be a huge site, with enough computing power to help millions of people use AI to do things we can only start to imagine today,” said Sam Altman, OpenAI’s chief executive.
None of it is built
Nothing at PORTS-Pike is running yet. The first 800 megawatts are expected in 2028, largely on existing AEP infrastructure. Everything beyond that needs new power plants, new transmission, permits, environmental reviews and financing. OpenAI starts paying only as completed capacity becomes available to lease. Nvidia’s guarantee, in the same way, attaches only once buildings finish and leases commence.
The ground around the paperwork is less settled. More than 500 US jurisdictions now ban or restrict data centres. Nvidia’s credit-default swaps hit a record last month on precisely these circular-financing worries. And the guarantee dissolves the moment OpenAI earns a credit rating strong enough to borrow on its own name.
OpenAI told investors this month that its enterprise revenue has overtaken its consumer business. Rent will come from that growth plus money it raises, the company says. So the test has a date on it. If the first 800 megawatts energise in 2028 and OpenAI is paying without a claim landing on Nvidia, the structure worked. If OpenAI holds a credit rating by then, Nvidia never needed to write it.
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