Nvidia Pursues $750B in AI Deals Amid Circular Demand Concerns
The chipmaker is backing massive data center projects with customers who also buy its processors, raising questions about financing risk.
Nvidia is pursuing more than $750 billion in new AI agreements as it deepens its role as both supplier and financier of the global AI infrastructure buildout, according to AI Watch. The moves include a massive partnership with South Korean conglomerate SK Group and potential financing arrangements with OpenAI, but have sparked investor concerns about the chipmaker's growing exposure to its own customers.
The SK Group Partnership
The centerpiece of Nvidia's expansion is an agreement with SK Group expected to generate over $500 billion in business between the two companies. The partnership calls for developing more than 2 gigawatts of AI data centers on the Korean Peninsula—enough electricity to power roughly 1.5 million homes.
SK Telecom will build the first AI factory, scheduled to open next year. Nvidia will collaborate with SK Hynix, a leading memory chip manufacturer, on future high-bandwidth memory products. This arrangement could help Nvidia secure components that remain scarce as AI data center construction accelerates globally.
Separately, Nvidia agreed to invest $1 billion in Naver, a South Korean internet and cloud services provider, to expand an AI data center being developed with private equity firm Brookfield. The investment is expected to more than triple the facility's size, which will run on Nvidia's AI computing hardware. Naver's shares jumped more than 8% in Seoul following the announcement.
The OpenAI Financing Discussions
Nvidia is also in preliminary talks to support OpenAI's access to a proposed $500 billion, 10-gigawatt data center hub in Ohio being developed by a SoftBank Group subsidiary. The chipmaker is considering guaranteeing as much as $250 billion to help OpenAI lease capacity at the facility, while separately discussing financing approximately $350 billion of OpenAI's processor purchases for the project.
These negotiations remain early-stage and could change substantially or fall apart entirely, AI Watch reported.
Market Reaction and Risk Questions
Nvidia shares declined as much as 5.3% to $195.92 in New York trading Monday following the news. The annual cost of protecting the company's debt against default rose by approximately 0.14 percentage point to around 0.82 percentage point.
Investors have raised concerns that Nvidia is increasingly financing the same businesses and infrastructure projects that purchase its chips. If AI spending slows or customers fail to generate adequate returns on their investments, Nvidia's dual role as supplier and financier could amplify its exposure.
CEO Jensen Huang has pushed back against claims that these agreements create circular demand, arguing that Nvidia's investments represent only a small fraction of the total capital its customers must ultimately raise.
Why it matters
Nvidia's financing strategy reveals both the scale of AI infrastructure investment and the risks inherent in the current buildout phase. By backing its customers' projects, Nvidia is betting that demand for AI computing will justify massive capital expenditures—but it's also tying its fortunes more closely to the financial health and success of those same customers. For business leaders evaluating AI infrastructure investments, these deals underscore both the enormous capital requirements and the uncertainty about long-term returns.
These details were first reported by AI Watch.
This is an original analysis by the Omega editorial team. Source reporting: AI Watch.
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