TLDR
- Nvidia is in talks to provide a $250 billion financing guarantee to help OpenAI lease a massive data center in Ohio
- CoreWeave, Nebius, and IREN shares all rose in pre-market trading Monday following the news
- The 10-gigawatt project in Pike County, Ohio is being developed by a SoftBank energy subsidiary and could cost over $500 billion total
- Nvidia holds equity stakes in all three neocloud companies, including a 9.3% stake in Nebius and 47.2 million shares in CoreWeave
- Wall Street analysts give all three stocks a Moderate Buy rating, with IREN showing the highest upside potential at around 103%
Shares in neocloud companies CoreWeave, Nebius, and IREN all climbed in pre-market trading on Monday, July 27. The gains came after The Wall Street Journal reported that Nvidia is in talks to provide a $250 billion financing guarantee for OpenAI’s data center project.
CoreWeave, Inc. Class A Common Stock, CRWV
The three stocks had fallen on Friday. The Monday bounce appeared tied to investor optimism around what Nvidia’s move could mean for the broader AI infrastructure sector.
What Nvidia Is Planning
According to the Wall Street Journal, Nvidia’s financing backstop would help OpenAI secure better loan terms to lease capacity in one of the largest AI data center projects ever built.
The project is a 10-gigawatt campus in Pike County, Southern Ohio. It is being developed by an energy subsidiary of SoftBank Group. The total cost of the project is expected to exceed $500 billion, including chips.
Nvidia’s $250 billion guarantee would cover the data center lease and debt financing. It would not cover the cost of Nvidia chips inside the center. The chipmaker is also said to be discussing financing OpenAI’s chip purchases worth up to $350 billion.
The first phase of the project is expected to wrap up in 2028 with around 800 megawatts of power. Funding for the power infrastructure is tied to a recent U.S.-Japan trade deal.
Why Neocloud Investors Are Paying Attention
For OpenAI, the deal would be its first step toward owning its own infrastructure rather than renting from Microsoft, Amazon, and Oracle.
For neocloud companies, Nvidia’s move is being read as a signal of confidence in the AI data center market. Smaller GPU cloud providers like CoreWeave, Nebius, and IREN rely on debt facilities and syndicated loans to fund their growth. A high-profile financing backstop could make lenders more comfortable with the sector.
CoreWeave has an existing relationship with OpenAI worth around $22.4 billion in contracts. OpenAI does not carry an investment-grade credit rating, which makes borrowing expensive. Nvidia’s guarantee could ease that pressure.
Nvidia has also taken direct equity positions in all three companies. It holds a 9.3% stake in Nebius, 47.2 million shares in CoreWeave, and is discussing a potential $2.1 billion equity stake in IREN. Nvidia also recently signed a $3.4 billion AI cloud services deal with IREN.
Bloomberg Intelligence analyst Anurag Rana said the structure suggests Nvidia is prepared to support larger AI infrastructure projects and that demand concerns may be overblown.
All three stocks currently carry a Moderate Buy consensus from Wall Street. IREN has the highest upside potential at approximately 103%, based on an average price target of $75.18.
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