Nvidia is committing as much as $100 billion to OpenAI in a bold partnership that aims to change the AI landscape through an unrivalled AI infrastructure scale-up.
This investment will fuel the deployment of at least 10 gigawatts of AI computing power, making it arguably the biggest AI infrastructure project in history. More importantly, for OpenAI, the investment translates into easy access to cutting-edge GPUs needed to maintain its rapid growth and competitive edge in the ferocious and escalating AI arms race.
“Nvidia and OpenAI have pushed each other for a decade, from the first DGX supercomputer to the breakthrough of ChatGPT,” Nvidia CEO Jensen Huang said in a press release. “This investment and infrastructure partnership mark the next leap forward — deploying 10 gigawatts to power the next era of intelligence.”
The partnership between Nvidia and OpenAI mirrors quite a unique investment model. Under the partnership, both companies signed a letter of intent to deploy at least 10 gigawatts of Nvidia-powered AI data centers to power OpenAI’s next-gen AI infrastructure.
To put this scale into perspective, 10 gigawatts of computing capacity roughly equals the power consumption of over eight million U.S. households.
The deal’s structure is also innovative. Nvidia’s investment will come through acquiring non-voting shares in OpenAI, with OpenAI using those funds to buy Nvidia’s chips and AI systems. OpenAI will lease Nvidia’s high-performance GPUs using Nvidia’s massive capital, creating a circular financial flow where most of the investment returns to Nvidia via chip leasing.
OpenAI, already serving more than 700 million weekly active users, benefits tremendously from this partnership. With this massive investment comes an acceleration to OpenAI’s ability to effectively scale its AI models and infrastructure, especially to meet growing AI demands and to continue building massive compute infrastructure.
“Everything starts with compute,” OpenAI CEO Sam Altman said in a statement. “Compute infrastructure will be the basis for the economy of the future, and we will utilize what we’re building with Nvidia to both create new AI breakthroughs and empower people and businesses with them at scale.”
The market responded enthusiastically to this partnership. Upon the news hitting the market, Nvidia’s shares surged as much as 4.4%, adding around $170 billion to the company’s market value.
This partnership also exists within the broader context of OpenAI’s vast AI infrastructure initiative known as the Stargate Project. Stargate involves multiple investment partners including Oracle, OpenAI, SoftBank, and investment firm MGX, with Microsoft as a key technology partner.
Announced earlier this year, Stargate’s plan is to invest $500 billion in AI infrastructure over the next four years in the U.S. The project also aims to create hundreds of thousands of American jobs, which would amplify the economic impact of AI infrastructure investments and nurture a fertile ecosystem for innovation across many industries.
However, amid the excitement for the recent partnership between Nvidia and OpenAI, there are also voices of caution and scrutiny. Some analysts warn of circular financing, pointing to how Nvidia’s investment fuels a loop where Nvidia invests in companies that purchase its chips. This raises competitive concern and questions about market concentration, especially as Nvidia has gone on an AI startup portfolio expansion spree.
“On the one hand, this helps OpenAI deliver on what are some very aspirational goals for compute infrastructure, and helps Nvidia ensure that that stuff gets built,” Bernstein analyst Stacy Rasgon said. “On the other hand the ‘circular’ concerns have been raised in the past, and this will fuel them further.”
The scale of this investment could also attract antitrust scrutiny and command attention from the U.S. Justice Department and Federal Trade Commission.
Andre Barlow, an antitrust lawyer at Doyle, Barlow & Mazard, complemented the deal saying that it “could potentially lock in Nvidia’s chip monopoly with OpenAI’s software lead.” However, he also added that the deal “could potentially make it more difficult for Nvidia competitors like AMD in chips or OpenAI’s competitors in models to scale.”
While both companies will finalize the details of the partnership in the coming weeks, Nvidia confirmed that the first gigawatt of Nvidia is targeted to come online for late 2026 through Nvidia’s next-gen Vera Rubin platform.
