Bengaluru /San Francisco — Nvidia will invest up to $100bn in OpenAI and supply it with data centre chips, the companies said on Monday, marking a tie-up between two of the highest-profile players in the global artificial intelligence (AI) race.
The move underscores the increasingly overlapping interests of the various tech giants developing advanced AI systems. The deal gives Nvidia a financial stake in the most prominent AI company in the world, which is already an important customer.
The investment gives OpenAI the cash and access it needs to buy advanced chips it needs in the first place to maintain its dominance in an increasingly competitive landscape.
The deal will involve two separate but intertwined transactions, according to a person close to OpenAI. OpenAI will pay Nvidia in cash for chips, while Nvidia will invest in OpenAI for non-controlling shares, the person said.
The first $10bn of Nvidia’s investment will begin once the two sides reach a definitive agreement for OpenAI to purchase Nvidia systems. OpenAI was most recently valued at $500bn.
Nvidia will start delivering hardware as soon as late 2026, with the first gigawatt of computing power to be deployed in the second half of that year on its Vera Rubin platform.
“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 utilise what we’re building with Nvidia to both create new AI breakthroughs and empower people and businesses with them at scale.”
The two companies signed a letter of intent to deploy at least 10GW of Nvidia systems for OpenAI’s AI infrastructure and said they aim to finalise partnership details in the coming weeks.
Nvidia shares rose as much as 4.4% after the announcement to a record intraday high, while Oracle gained about 5%. Oracle is working with OpenAI, SoftBank and Microsoft on the $500bn Stargate project, a plan to build massive AI data centres around the world.
“Demand for Nvidia GPUs is effectively baked into the development of frontier AI models, and deals like this should also ease concerns about lost sales in China,” said eMarketer analyst Jacob Bourne.
“It also throws cold water on the idea that rival chipmakers or in-house silicon from the big tech platforms are anywhere close to disrupting Nvidia’s lead.”
Broader industry moves
The pact is the latest in a series of agreements between major technology players. Microsoft has invested billions in OpenAI since 2019, and Nvidia last week unveiled a collaboration with Intel on AI chips. Nvidia also committed $5bn to Intel earlier this month and backed OpenAI in a $6.6bn funding round in October 2024.
The scale of Nvidia’s latest commitment could attract antitrust scrutiny. The justice department and Federal Trade Commission reached a deal in mid-2024 that cleared the way for potential probes into the roles of Microsoft, OpenAI and Nvidia in the AI industry. However, the Trump administration has so far taken a lighter approach to competition issues than the Biden administration.
OpenAI and its main backer Microsoft also announced earlier this month that they had signed a nonbinding agreement to restructure OpenAI into a for-profit entity, signalling further changes in the governance of the fast-growing AI company.
OpenAI was working on a custom chip with Broadcom and Taiwan Semiconductor Manufacturing Company, Reuters reported earlier this year, as the training-focused chip is viewed as a strategic tool to strengthen its negotiating leverage with other chip suppliers.
Broadcom shares were down 0.5% after the news. However, the deal does not change any of OpenAI’s ongoing compute plans, including its partnership with Microsoft or its efforts to build its own chips, a person familiar with the matter said.
Rivals such as Google, Amazon and Microsoft have also invested in designing their own AI accelerators, part of a broader push to diversify away from Nvidia chips, which remain in short supply.
Reuters
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