Nvidia Corp. will invest up to $100 billion in OpenAI to support new data centers and other artificial intelligence infrastructure. This is a major deal that highlights the strong demand for AI tools like ChatGPT and the computing power needed to run them.
The two companies announced the deal on Monday, saying they had signed a letter of intent for a strategic agreement. The investment aims to help OpenAI build at least 10 gigawatts of capacity in data centers and equip them with Nvidia’s advanced chips for training and deploying AI models.
According to informed sources, the funds will be disbursed in phases, with the first $10 billion being made available upon the signing of the agreement. The sources said that Nvidia will make the investment in cash and will receive equity in OpenAI as part of the deal. As the negotiations were private, the sources declined to be named. Subsequent funds will increase gradually as each gigawatt of computing capacity is deployed.
Investors welcomed the collaboration, and Nvidia’s share price rose 3.9% in New York trading. So far this year, the stock has climbed about 37%, solidifying its position as the world’s most valuable company by market capitalization. Meanwhile, OpenAI is the world’s largest technology startup. Bloomberg News reported last month that OpenAI was in preliminary talks to sell shares at a valuation of $500 billion.
These companies are leading the global wave of building data centers for the next generation of artificial intelligence tools – an effort expected to cost trillions of dollars. This work requires advanced chips, servers, cooling systems and a huge amount of electricity.
The scope of the Nvidia-OpenAI collaboration is vast: 10 gigawatts is equivalent to the peak electricity demand of New York City. Nvidia CEO Jensen Huang said in a statement: “This investment and infrastructure collaboration marks the next leap – deploying 10 gigawatts of power to fuel the next era of intelligence.”
Nvidia has been leveraging its substantial financial resources to ensure that its technology remains at the core of artificial intelligence systems. By reaching an agreement with OpenAI, Nvidia is strengthening its ties with this important ally. This startup has developed market-leading chatbots and is working to expand its own AI infrastructure. The agreement indicates that even as Nvidia is exploring other suppliers, OpenAI will remain a key customer for the company.
Nvidia also positions itself as a defender of domestic technological infrastructure – a priority of the Trump administration. The California-based chipmaker has been striving to build a friendly relationship with the White House as it needs Washington to ease export restrictions to China.
Last week, Nvidia agreed to invest up to 5 billion US dollars in Intel, a long-troubled chipmaker that currently has a portion of its equity owned by the US government.
On Monday, Sam Altman, the CEO of OpenAI, said that the deal with Nvidia would ensure the necessary computing power, leading to new breakthroughs in artificial intelligence.
In his statement, he said, “Everything starts with computing. Computing infrastructure will be the foundation of the future economy.”
OpenAI’s ChatGPT is used by approximately 700 million people each week, and its products require a significant amount of computing power to maintain and build. In the past, the company faced computing power limitations in meeting customer demands, especially during the launch of new products. On Sunday, Altman posted on social media that his company will launch some new “computationally intensive” products in the coming weeks.
Nvidia and OpenAI have not provided details about the investment in OpenAI or the timing of the investment. When announcing the deal, the two companies said, “We look forward to finalizing the details of the new phase of strategic cooperation in the coming weeks.”
Huang Renxun said that the project will involve up to 5 million Nvidia chips, a figure equivalent to the company’s total shipments this year. He described it as a “giant project” in an interview with CNBC.
Nvidia has also been involved in recent deals to expand computing infrastructure in the UK, France and the Middle East, and has supported several artificial intelligence startups.
Stacy Rasgon, an analyst at Bernstein Research, said that Huang “seems to be busy with multiple deals at the moment.” “However, this collaboration with OpenAI appears to be on a scale that exceeds all others.”
He indicated that the revenue impact from this collaboration might be greater than the investment itself. Lasseter said that the power for a 1-gigawatt data center could require tens of billions of dollars worth of NVIDIA products.
Nvidia said in another statement that the deal with OpenAI does not mean a reduction in priority for other customers.
