Nvidia and OpenAI in talks for up to $250 billion backstop to fund AI infrastructure plans

Nvidia is reportedly in discussions with OpenAI about a backstop of up to $250Bn to help fund its plans to lease a massive new artificial intelligence data centre.

The backstop would allow OpenAI to raise debt for a 10 GW data centre campus in Pike County, Ohio, on the strength of Nvidia's credit.

The guarantee would cover the lease and construction debt, not the Nvidia chips inside, which the two companies are discussing separately.

The cost of protecting Nvidia's debt against default surged by the most on record on Monday after reports that the chipmaker is in conversations on more than $750Bn of artificial intelligence infrastructure deals, stoking fears that the company is taking on even more obligations.

The price of protecting Nvidia's debt against default for five years rose as much as about 0.14 percentage point to as high as around 0.82 percentage point a year on Monday, according to ICE data services.

An AI initiative with the parent of South Korean chipmaker SK Hynix Inc. unveiled late Friday is worth more than $500Bn, Nvidia said. The world's most valuable company is also in discussions to provide a guarantee of as much as $250Bn to help OpenAI lease computing from a US data centre project, in what would be among the chipmaker's biggest financing deals with a customer.

Reference Sources

1. cnbc - Nvidia and OpenAI in talks for up to $250 billion dollar backstop to fund AI infrastructure plans
2. bloomberg - Nvidia Credit Risk Jumps in Swaps Market on AI Deal Talk Reports
3. barrons - Nvidia in Talks to Finance OpenAI, Report Says. What It Means for the Stock.
4. barrons - Nvidia Eyes OpenAI, SK Hynix Deals—Why the Stock Still Looks Like a Chip Laggard
5. bloomberg - Nvidia’s $750 Billion Deals Revive Fear of AI Circular Financing

Amazon targets Musk’s Starlink with satellite constellation for mobile services

Amazon has filed an application with the US Federal Communications Commission for permission to launch a 5,105-Satellite Constellation to provide mobile phone services to consumers around the world, as it steps up its efforts to take on Elon Musk’s Starlink.

The Tech giant said on Tuesday it has filed an application with the regulator for permission to deploy the Constellation by 2028.

It said the system would provide voice, Messaging, data and emergency services.

The filing is the first step from Amazon into satellite mobile connections, which has until now been dominated by SpaceX’s Starlink service. Musk’s group has signed partnerships with existing operators such as T-Mobile US and the UK’s Virgin Media O2 to provide phone services for customers where their conventional networks do not reach.

Starlink operates across more than 150 countries, offering high-speed Internet connections through its Constellation of satellites. Last month, The FT reported that Starlink may go one step further and launch a mobile service directly for US consumers, in a move that would upend the country’s multibillion-dollar cellular phone market.

Amazon’s move is set to intensify competition in the “ direct-To-device ” mobile market, with others including Ast Space Mobile, which has partnered with Vodafone.

Amazon is targeting users who are “ Unserved or Underserved ” by existing Wireless providers, the filing States.

Reference Sources

1. ft - Amazon targets Musk’s Starlink with satellite constellation for mobile services
2. bloomberg - Amazon Seeks FCC Nod to Beam Satellite Coverage to Mobile Phones
3. cnbc - Amazon seeks federal approval to launch 5,105 satellites for direct-to-device network

Volkswagen in Talks with Chinese Partner on Spanish Battery Plant, Trade Outlet Reports

Volkswagen and its partner Gotion are reportedly in advanced talks about a possible stake for the Chinese company in the German carmaker's battery plant in Valencia.

The process has involved high-level visits by the Chinese battery manufacturer's CEO, Li Zhen, to evaluate operations.

Volkswagen's Upstart battery business Powerco operates the plant, which is expected to begin production at the end of the year and gradually scale up.

The report said Gotion could take a majority stake in a joint venture for the Valencia site.

A Powerco spokesperson said the company had no plan to cede control of the site.

Reference Sources

1. aawsat - Volkswagen in Talks with Chinese Partner on Spanish Battery Plant, Trade Outlet Reports

The CommonWealth English daily news digest is a service curated by CommonWealth English team with the help of AI tools.  

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