Nvidia shares dropped nearly 5 per cent on Monday after reports that artificial intelligence financing arrangements involving the chipmaker could exceed $750 billion, raising questions over the financial links emerging around the AI infrastructure boom.
The reported figures relate to separate initiatives connected to Nvidia Corp, the leading supplier of graphics processing units used in artificial intelligence systems. Nvidia has announced a partnership with SK Group, the South Korean conglomerate that owns memory chipmaker SK hynix, valued at more than $500 billion.
Separately, Nvidia was reported to be in discussions to provide a guarantee of up to $250 billion to support OpenAI's lease commitments for a planned US data centre project. The company was also discussing financing of up to $350 billion in Nvidia chip purchases linked to the facility, people familiar with the talks said.
The reports have attracted attention because Nvidia could potentially play two roles in the AI infrastructure build-out: supplying the processors used by AI companies while also backing financing arrangements that help those companies secure computing capacity.
The developments have renewed discussion around 'circular financing', a term used by some investors to describe situations where companies provide funding, guarantees or investments to customers that later purchase their products.
OpenAI Data Centre Project Drives Nvidia Financing Discussions
The reported financing discussions centre on OpenAI's planned data centre project in Ohio, which is being developed with support from SoftBank Group, the Japanese technology investment company.
People familiar with the matter said Nvidia was considering guaranteeing up to $250 billion to support OpenAI's lease obligations for computing capacity at the site.
A separate discussion involves financing up to $350 billion of Nvidia chip purchases expected to be used for the project, according to people familiar with the talks.
The discussions remain preliminary and could change or fail to result in an agreement.
SK Group Partnership Adds to Nvidia AI Infrastructure Plans
The OpenAI discussions have followed Nvidia's announcement of a separate partnership with SK Group valued at more than $500 billion.
SK Group includes SK hynix, one of the world's largest suppliers of high-bandwidth memory chips used alongside Nvidia processors in advanced AI systems.
Nvidia said the partnership would focus on AI factories, computing infrastructure and next-generation technology.
The agreement has added to a series of large-scale AI infrastructure commitments involving chipmakers, technology companies and suppliers of supporting hardware.
Investors Examine Circular Financing Risks in AI
The reported arrangements have increased scrutiny of financial relationships developing between chip suppliers, AI developers and infrastructure providers.
In the case of Nvidia and OpenAI, investors have focused on whether financing links between suppliers and customers could create additional exposure across the sector.
Circular financing typically refers to arrangements where companies provide capital support to businesses that later use that support to purchase products or services from the same ecosystem.
Similar structures have appeared across the technology sector, including agreements where companies provide financial backing, capacity commitments or investment support to strategic partners.
Companies involved in such arrangements have said these partnerships help accelerate infrastructure development and expand access to computing resources.
Nvidia has previously said its investments and partnerships are separate from direct product sales and that customers remain responsible for purchasing its technology.
Nvidia Faces Questions Over AI Capital Expansion
Nvidia has benefited from strong demand for its AI processors as technology companies increase spending on data centres and computing capacity.
The latest share price decline has followed reports about potential financing structures connected to future AI infrastructure projects, rather than a change in Nvidia's reported chip demand.
The company has not confirmed the reported OpenAI guarantee or chip financing discussions.
The talks remain preliminary, and no final agreements have been announced.
