According to informed sources, Nvidia Corporation is on the verge of finalizing an agreement to invest 20 billion US dollars in OpenAI as part of its latest round of financing. This will be the largest single investment by the chipmaker in the developer of ChatGPT.
According to people familiar with the matter, Nvidia’s acquisition plan is close to completion. As the information has not been made public, these people requested anonymity. The deal has not been finalized yet and the terms could still change.
Both OpenAI and NVIDIA declined to comment.
According to Bloomberg, OpenAI plans to raise up to $100 billion in a new round of financing, with the majority of the funds coming from large technology companies. Amazon has held talks about investing up to $50 billion, and SoftBank Group has also held talks about investing up to $30 billion. The Financial Times previously reported that Nvidia may invest up to $20 billion.
Nvidia and OpenAI have long been two pillars of the booming artificial intelligence industry, but recently, their relationship has come under new scrutiny amid reports of tensions between the two companies. The Wall Street Journal reported on Friday that Nvidia’s plan to invest up to $100 billion in OpenAI, announced in September, has stalled after some within the chipmaker expressed doubts about the deal.
The CEOs of both companies later publicly stated that they remain committed to continuing their cooperation. Nvidia CEO Jensen Huang told reporters during a visit to Taipei on Saturday: “We will definitely participate in the next round of financing because it is a very good investment.” He also added that this could potentially become “our largest investment to date.”
However, recently, the performance of US technology stocks has not been good.
“Trading on Wall Street today was marked by a split, with cyclical stocks taking the lead over technology stocks, despite Palantir’s release of a blockbuster report last night that far exceeded expectations and raised its outlook, which initially boosted optimism about the prospects of artificial intelligence,” said Jose Torres of Interactive Brokers.
A portfolio of US software stocks selected by Goldman Sachs Group Inc. fell 6% on Tuesday, marking its biggest one-day drop since the tariff-driven sell-off in April. The Nasdaq 100 index, dominated by technology stocks, declined 1.6%.
Over the past three years, artificial intelligence companies have been the dominant force in the US stock market. However, an increasing number of investors believe that the rally led by the “Big Seven” is coming to an end and that overall market participation will increase. By 2026, the market landscape will have changed significantly, with value stocks outperforming growth stocks.
Chris Senyek, a strategist at Wolfe Research, said: “Our sense is that the market is roiling beneath the surface due to the conflict between concerns over AI capital expenditures and the ‘hope and dreams’ brought about by the accelerating growth of the US economy.”
