Nvidia and Microsoft in AI Arms Race: $250 Billion Financing and OpenAI's Investment Moves

Nvidia (NVDA) could backstop $250 billion of financing for OpenAI's 10-gigawatt Ohio data center project. Reuters reports the total cost could exceed $500 billion. Nvidia is negotiating both a $250 billion lease guarantee and $350 billion in chip financing with SoftBank's SB Energy. Could this shift OpenAI's dependency on Microsoft (MSFT)?

Nvidia's Risk-Taking and Microsoft's Loss

■Nvidia could guarantee OpenAI's lease financing against its stronger credit.

■Microsoft, despite a $250 billion commitment to Azure, could lose revenue if OpenAI leases the Ohio campus directly.

■OpenAI retains a non-exclusive licensing deal with Microsoft through 2032.

Market Impact: New Battle in the Chip Crisis

■Nvidia's risk-taking could boost chip demand, while Microsoft's potential Azure revenue loss could disappoint markets.

■Hedge funds show 282 portfolios still long MSFT, despite a low 1.24% short float.

Nvidia's risk-taking threatens Microsoft's Azure revenue, while OpenAI's investment decisions could reshape the AI sector's power dynamics. This move may signal a new phase in the chip crisis.