Nevada’s AI infrastructure boom just reached a new scale as I learned that Nvidia has reportedly signed a massive lease for a 200-megawatt data center facility in Storey County, backed by a $3.8 billion junk bond sale that was upsized by $150 million in early 2025. This deal positions Nvidia at the center of what’s becoming one of the nation’s most aggressive AI hub buildouts, though the financing structure raises questions about risk in the red-hot data center market. The reported 16-year initial lease term signals a long-term bet on Nevada’s emergence as a critical node in the AI compute infrastructure race.
Nvidia’s AI Infrastructure Push
Nvidia’s appetite for data center capacity reflects the massive infrastructure demands detailed in the company’s 10-K filings, which highlight critical dependencies on cloud and colocation facilities alongside warnings about supply constraints that could limit growth. The company has explicitly disclosed its reliance on third-party data centers to support its AI compute ecosystem, noting that access to sufficient infrastructure remains a key risk factor for meeting customer demand. These disclosures frame why a 200-megawatt facility would be strategic for Nvidia’s expansion plans, even as the company has not yet confirmed this specific lease.
The scale of AI compute demands continues to outpace available infrastructure, creating what industry executives describe as a critical bottleneck for AI development. While I couldn’t locate a specific Nvidia executive quote about these compute demands in the available sources, the company’s regulatory filings make clear that data center capacity constraints represent one of the primary challenges to maintaining its AI market leadership. This context helps explain why Nvidia would pursue such a large-scale facility commitment in Nevada’s growing tech corridor.
The Nevada Project Breakdown
The Nevada facility represents a 200-megawatt data center plus substation in Storey County near Reno, with Tract Capital statements confirming the 16-year initial term plus two 10-year extension options. The project’s borrower entity has been identified as SV RNO Property Owner 1, a special purpose vehicle typical of large-scale data center developments. This structure allows for project-specific financing while isolating risk from the parent companies involved.
The 200-megawatt capacity puts this facility among the larger single-site deployments in the region, representing enough power to support tens of thousands of high-performance AI servers. The inclusion of a dedicated substation indicates the project’s scale requires direct grid connectivity beyond what standard commercial power infrastructure could provide, a hallmark of hyperscale data center development designed for AI workloads.
Junk Bond Financing Risks
The $3.8 billion high-yield bond structure financing this project carries the “junk” designation due to its below-investment-grade rating, reflecting higher risk and typically higher interest costs compared to investment-grade debt. This financing approach aligns with Fleet Data Centers’ stated model of developing mega-scale campuses targeting 500 megawatts or more, often designed for single users with massive compute requirements. The bond sale’s upsizing by $150 million suggests strong investor appetite despite the risk profile, though specific yield details remain thin in available evidence…