Wall Street Is Obsessing Over Nvidia's $105 Billion Circular Financing Structure With OpenAI. Here's the More Important Deal No One Is Talking About.
Yahoo Finance ·
Nvidia ( NVDA +4.48% ) sits at the center of two very different bets on artificial intelligence (AI) infrastructure. One side of the equation is loud and already consumes Wall Street's attention: a deepening commercial and financial partnership with OpenAI. The other side is quieter and much easier to miss: a reported agreement to acquire Hugging Face , a website where open-source AI models are published and shared. The Nvidia-OpenAI relationship builds and fills AI factories. With Hugging Face, Nvidia can own something far more lucrative -- the marketplace where AI factories get their orders. Let's break down both deals and explore what's at stake for Nvidia investors. In February, OpenAI conducted a funding round that raised $110 billion at a $730 billion pre-money valuation. During that round, SoftBank and Nvidia each invested $30 billion, while Amazon committed $50 billion. More recently, SoftBank's SB Energy announced that it plans to build a data center at PORTS-Pike Technology Campus in Pike County, Ohio, and lease the facility to OpenAI. The initial build-out plan covers 4.25 gigawatts of capacity, with an option for an additional 3.75 gigawatts. Nvidia will be the exclusive compute supplier as capacity comes online in 2028. According to an 8-K filing in late August, Nvidia entered into a series of residual value guarantees for up to $105 billion to help finance this infrastructure.
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