Nvidia (NVDA) Stock; Slight Dip Amid 16-Year Data Center Lease Plans

TLDRs;

• Nvidia plans a 16-year Nevada data center lease to secure dedicated AI infrastructure, prompting slight stock dip.
• $3.8B junk bond issuance backs Nvidia’s 200-megawatt data center with strong investor demand.
• Legal ruling in Storey County permits single-tenant facilities, clearing path for Nvidia’s long-term lease.
• Nvidia’s move signals AI hardware leaders increasingly building proprietary infrastructure to control operations.

Nvidia (NVDA) shares experienced a slight decline following reports that the chipmaker plans to lease a major data center in Storey County, Nevada. Sources indicate the project will be financed through a US$3.8 billion junk bond issuance, reflecting strong investor interest in infrastructure tailored for AI workloads.

NVIDIA Corporation, NVDA

The proposed data center is expected to have a total capacity of 200 megawatts and marks a notable step in Nvidia’s ongoing efforts to secure long-term, dedicated infrastructure for AI hardware. The initial lease term is set at 16 years, with the option to extend twice for an additional 10 years each.

Junk Bond Deal Attracts Strong Demand

The bond issuance, backed by Tract Capital, was increased by US$150 million due to robust investor appetite, targeting an approximate yield of 6%. Tract Capital’s Fleet I fund, which owns the data center project, is anticipated to contribute about US$620 million in equity, partially offset by the debt proceeds.

JPMorgan Chase is leading the bond offering, with Morgan Stanley serving as co-manager. The deal is slated to price on February 13, providing Nvidia with a structured, long-term financing solution for a project that aligns closely with its AI infrastructure ambitions.

Legal Context in Storey County

The data center site lies within Storey County, Nevada, where Tract Capital has been engaged in a multi-year legal dispute with Switch Data Centers. Switch operates the Tahoe-Reno 1 campus, also known as Citadel, and previously claimed that a land covenant restricted competing development to multi-tenant colocation facilities.

A 2025 ruling clarified that the covenant does not restrict single-tenant, wholesale, or dedicated cloud facilities, which clears the way for Nvidia’s project. While the court decision may inform local development, sources emphasize that Nvidia’s lease financing is an independent transaction and should not be directly attributed to the litigation outcome.

AI Leaders Shaping Their Own Infrastructure

Historically, Nvidia has relied on cloud providers such as AWS and Microsoft Azure to host AI workloads. This new 16-year lease represents a shift toward more control over facility design, operational costs, and long-term access to specialized hardware infrastructure.

By securing dedicated capacity, Nvidia joins a growing cohort of AI chipmakers and model developers who aim to reduce reliance on traditional cloud providers. The project, situated within Fleet Capital’s broader Fleet Data Centers platform, is designed to accommodate large, single-tenant campuses tailored to the needs of cutting-edge AI workloads.

This strategic move highlights a broader trend in the tech industry: companies developing their own infrastructure to gain leverage in managing physical resources for AI computation. Experts note that this approach could reshape the balance of power in the AI infrastructure space, providing first-mover advantages for firms like Nvidia that secure capacity early.

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