OpenAI is close to leasing a $500 billion data center in southern Ohio that could be among the largest of the artificial intelligence boom, according to three people familiar with the project.<\/p>\n
OpenAI is in separate talks with the chipmaking giant Nvidia for a $250 billion financial backstop for the project, said the three people, who spoke on the condition of anonymity because they were not authorized to discuss it.<\/p>\n
The U.S. government, which is helping to provide the electrical power for the project, is still talking to other potential tenants, and the deal will not be final until Commerce Secretary Howard Lutnick agrees to it, one of the people said.<\/p>\n
But the Japanese conglomerate SoftBank, an OpenAI investor that is leading the development of the data center, and government officials are leaning toward OpenAI as the main tenant because Nvidia has added financial muscle to the A.I. company\u2019s proposal, the three people said.<\/p>\n
Microsoft, Google and possibly other companies have also submitted bids to use the data center, the people said. The center, financed in part through a trade deal with Japan, will be backed by 10 gigawatts of electricity, which is enough to power millions of households.<\/p>\n
The financing for the Ohio project is indicative of the elaborate deals that have helped fuel the A.I. boom over the past several years. Through unusual and creative arrangements with chipmakers, cloud-computing companies and governments across the globe, start-ups like OpenAI and Anthropic are tapping into huge amounts of computing power they could not afford on their own.<\/p>\n
Many of these deals can be described as circular<\/a>. A start-up will receive billions of dollars from giant tech companies before sending those billions back to the same companies to pay for computing power and other services.<\/p>\n Last week, Anthropic announced such a deal with Advanced Micro Devices, one of Nvidia\u2019s chief rivals. AMD agreed to invest $5 billion in Anthropic, while Anthropic agreed to buy tens of billions of dollars in hardware from the chipmaker. OpenAI has made similar agreements with AMD, Nvidia and others.<\/p>\n Nvidia would allow OpenAI and its partners to receive more favorable terms on the billions of dollars in debt they must raise to help fund the project. Nvidia would agree to cover both OpenAI\u2019s lease payments and its debts if the start-up was unable to make payments on its own.<\/p>\n Nvidia, with a market valuation of nearly $5 trillion, is one of the few companies in the world that have the financial wherewithal to backstop a deal of this size. It can help a smaller company raise large amounts of money at reasonable interest rates.<\/p>\n That makes the deal less risky, said Jeremy Kress, an associate professor of business law at the University of Michigan who specializes in financial stability and systemic risk in the economy.<\/p>\n \u201cIt is nice to have a backstop,\u201d he said. \u201cYou want to see stable money that can absorb losses.\u201d<\/p>\n The Wall Street Journal reported earlier on the talks<\/a> between OpenAI and Nvidia.<\/p>\n From 2019 through 2023, Microsoft pumped more than $13 billion into OpenAI. Then OpenAI funneled most of those billions back into Microsoft, buying cloud-computing power needed to fuel the development of new A.I. technologies. Anthropic made similar agreements with Google and Amazon. And Google has provided chips and financial backstops for new data centers built by Anthropic<\/a> and other partners.<\/p>\n