- Nvidia commits $ 100 billion to Openai while strengthening the demand for its hardware
- Partnership builds massive data centers and fuels about circular investment structures
- Analysts warn that Deal can raise antitrust — control as nvidia strengthens ai -dominance
After its recent surprise, $ 5 billion Intel is spending NVIDIA big again, this time up to $ 100 billion is going on to Openai along with delivering millions of its chips.
The move fits a wider pattern, with NVIDIA channels money for companies that depend on its own hardware, from $ 6.3 billion in Coreweave to $ 700 million in NSCALE, which effectively strengthens the demand for its products while bypassing hyperscalers like Google and Microsoft running to reduce their dependence on NVIDIA’s hardware.
This latest investment in the world’s best-known AI company immediately lifted Nvidia’s market value by more than $ 220 billion.
Circular structure
The trade involves a circular structure and will see that Nvidia will buy non-voted shares in Openai, which Openai will then mostly use on NVIDIA systems.
Quoting people who are familiar with the matter, Pakinomist Says the partnership begins with a $ 10 billion investment as Openai postponed more computing power.
“This is the biggest AI infrastructure project in history,” said NVIDIA founder and CEO Jensen Huang in an interview with CNBCJon Fortt. “This partnership is about building an AI infrastructure that allows AI to go from the laboratories to the world.”
He said companies will build data centers capable of running the next generation AI models, driven by Nvidia’s new Vera Rubin platform.
The first data centers are due online in 2026 and require 10 gigawatt power, roughly equal to the needs of 8 million US households.
Openai CEO Sam Altman said the capacity was important for the company’s ambitions.
“Building this infrastructure is critical for everything we want to do,” said Altman. “This is the fuel we need to create improvement, drive better models, drive revenue, drive everything.”
Analysts welcomed the long -term demand for Nvidia’s products, but warned about the structure of the agreement.
“On the one hand, this Openai helps deliver some very ambitious goals for calculating infrastructure,” said Stacy Rasgon of Bernstein. “On the other hand, the ‘circular’ concerns are raised in the past, and this will fuel them further.”
Kim Forrest, Chief Investment Officer, Bokeh Capital also sounded a note of caution. “This sounds like Nvidia is investing in its biggest customer. These events can be beneficial to both parties. But there may also be dangers. Being completely attached to each other can cause short-sightedness and can make an entrance point for other chip competitors to enter other AI companies and woo them,” she said.
MarketScreens Quotes Rebecca Haw Allensworth, an antitrust professor at Vanderbilt Law School that says there is concern that Nvidia could favor Openai with better prices or faster delivery times.
“They are financially interested in each other’s success,” she said. “It creates an incentive for Nvidia not to sell chips to or not sell chips on the same terms to other competitors of Openai.”
A spokesman for Nvidia denied that this would be the case and said, “We will continue to make any customer the highest priority, with or without any equity share.”
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