Nvidia is in early talks to provide up to $250 billion in financing guarantees to help OpenAI lease computing capacity from a planned $500 billion, 10-gigawatt data center facility in Ohio, according to Bloomberg, citing people familiar with the matter. The proposed deal highlights investor concerns that the AI bubble has been fueled by circular financing.

The SoftBank-led project is located in southern Ohio and, when fully built, would support 10 gigawatts of computing capacity, or roughly equivalent to the output of 10 large nuclear reactors. The first 800-megawatt phase is targeted for 2028. This would rank the facility among the world’s largest AI infrastructure hubs.

The potential backstop would help SoftBank secure financing while supporting future demand for Nvidia’s chips, further highlighting the circular nature of the AI boom. Sources said Nvidia-OpenAI negotiations are still ongoing and could change at any time.

“While Nvidia’s investments and partnerships reinforce confidence in long-term AI buildouts, investors remain concerned about circular financing,” said Gary Tan, a portfolio manager at Allspring Global Investments, as quoted by the media outlet.

Last week we noted …

The problem with the $2 trillion in circular AI financing is that it is all contingent on the frontiers (Anthropic/ OpenAI) being money good on their $1.5+TN in unfunded commitments. Which they won’t be if Chinese open LLMs grab market share

Hence the push against Chinese LLMs

— zerohedge (@zerohedge) July 23, 2026

The Bank for International Settlements warned last month (read report) that a “disappointment in returns could trigger a sudden pullback in financing and turn the capex boom into a protracted investment bust, with potential knock-on effects on financial conditions.” It added that a “major equity-market correction could have larger macroeconomic consequences today than in the past.”

Against that backdrop, traders will be laser-focused on this week’s Big Tech earnings for signals regarding the trajectory of AI capital spending and, more importantly, whether those investments are beginning to generate adequate returns (read report). Given the high concentration of AI stocks powering major equity indexes higher, the results could determine the market’s next big move.

Ed Dowd, writing on the Beyond the Narrative Substack, previously warned that the AI-capex rocket fuel propelling markets may be starting to fade. He identified four factors behind the potential inflection point. Read more here.