Nvidia (NVDA) disclosed in an SEC filing a $21 billion stake in SpaceX and a $30 billion stake in Intel (INTC). NVDA closed Friday at its highest price since June 2, about 5% below its all-time high set May 15. In the current session NVDA led the Mag 7, up 0.7% at about $226. Broadcom (AVGO) rose 0.6%, Intel gained 1.5% on the disclosure, and AMD lagged, down 0.6% - the only red name across an otherwise green chip sector.
The Ohio data center deal
Nvidia (NVDA) and OpenAI are partnering with SB Energy, a subsidiary of Japan's SoftBank, on an Ohio data center. SoftBank shares rallied on the news. Earlier reports said the commitment had been scaled back; that turned out to be false.
NVDA secured the land, power, and shell capacity through the SB Energy partnership to host Nvidia Compute at the Ohio site. The customer is OpenAI, which signed a 10-gigawatt data center deal. The project is expected to become one of the largest AI hubs to date.
Because OpenAI lacks investment-grade credit, NVDA stepped in to back the deal. It is backstopping a portion of the value of the completed data center, starting with the first phase, which represents about 5 gigawatts of power. In return, NVDA will be the exclusive chip provider for the first half of the site and take an equity stake in SB Energy. NVDA also has the option to expand its commitment to the full campus later.
The money and structure
The equity stake is a $1.5 billion investment in SB Energy. SB Energy is owned by SoftBank, counts OpenAI as an investor, and is reportedly working on an IPO as soon as next month, aiming to raise between $5 billion and $7 billion.
NVDA initially planned to guarantee all 10 gigawatts of OpenAI's data center commitments upfront, which would have totaled about $250 billion. NVDA shares fell in late July after that $250 billion guarantee discussion was reported.
The campus will rely on a 9.2-gigawatt natural gas plant that will be owned by the US government and financed by Japan under a recent trade deal.
NVDA's support is meant to make the project easier and cheaper to finance by giving lenders confidence that the data centers keep their value even if OpenAI stops being the tenant. The commitment requires a series of steps before NVDA would owe any payment. If OpenAI walked away, SB Energy would first try to lease the site to another customer at the same price. If it could not find a suitable replacement, it would try to sell the site, and NVDA would pay any difference in value up to $105 billion if the initial phase is already completed.
The deal matters because OpenAI is moving away from relying entirely on third-party cloud providers like Microsoft (MSFT), Amazon (AMZN), and Oracle (ORCL), and stepping up as a direct tenant. This shift comes alongside talk of OpenAI's own future IPO. NVDA is effectively becoming the landlord of the AI generation.
A trading view on Nvidia
Despite being a strong NVDA bull, I see a better near-term chance on the downside. My play: buy the 8/28 $227.50 puts at $5.25 or lower, risking about 50% to make over 100%. If NVDA works lower, it should find some support around $220, but a breakdown would push it into the $215 zone.
The reasoning: NVDA has struggled to extend higher even on plenty of positive news. I have real doubts the AI story keeps climbing while turmoil in the Middle East ramps up. This is a timing play - a fade for the near term to capitalize on downside.
Broader market read
The general markets look confused, and confusion usually means risk-off or very short-term trading. Parts of AI are strong: optics names are doing well, and memory plays are up because the Kospi rallied. The market keeps looking for clarity each day, and the picture keeps getting more muddled.
The near-term play to watch has nothing to do with AI - it ties to the crypto names, which are doing well. Circle (CRCL) has good breakout potential, and BMNR is another with breakout potential. Within AI, AMD closed above its 50-day simple moving average on Friday but struggled today, showing some signs of life.
The S&P is at all-time highs and the Nasdaq is approaching those levels but getting stuck and not pushing. Watch the Nasdaq: if it starts rolling over, it drags everything down, and money usually rotates into financials, sometimes industrials, and some software-as-a-service names. Retail traders may struggle in this range.
Keep watching the memory plays as the likely standout, with optics plays as a possible near-term recovery. NVDA sits in a range where a lot of retail and Wall Street traders have taken profits or hesitated to buy, which is why it looks more likely to fall than rise for the next week or so. It feels like calm before a late-August storm, with plenty of event risk ahead, including big retail earnings and data this week.
