Chip designer Nvidia will invest up to $100 billion in OpenAI, the companies announced Monday, creating a partnership that will focus on the development of artificial intelligence data centers and AI superintelligence.
Key Takeaways
- OpenAI will use at least 10 gigawatts worth of Nvidia systems for infrastructure used to train AI models (comparatively, 10 gigawatts could roughly power five Hoover Dams).
- As the Nvidia systems are deployed, the chip designer will invest $100 billion into OpenAI, with the first gigawatt of Nvidia’s tech slated to go online in the second half of 2026.
- Nvidia CEO Jensen Huang told investors last month the construction of one gigawatt of data center capacity costs between $50 billion and $60 billion, with Nvidia’s chips and systems accounting for about $35 billion of that cost.
- Nvidia shares are up 3.6% to $41.89 as of Monday afternoon, nearing their highest point of the year.
- The agreement was announced Monday.
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Why Are Datacenters Important For Openai?
Training and running AI models requires energy-intensive infrastructure, and with an increasing number of OpenAI users (700 million weekly) alongside competition from Elon Musk’s xAI and other firms, OpenAI has to go big on datacenters to meet demand.
Crucial Quote
OpenAI CEO Sam Altman said in Monday’s announcement, “Compute infrastructure will be the basis for the economy of the future” as OpenAI looks to one day deploy AI superintelligence, a hypothetical AI system with intelligence beyond the scope of any human.
Key Background
Nvidia joins Microsoft as one of a few companies providing services and products to OpenAI in addition to investing in the startup. Microsoft has invested some $13 billion into OpenAI and is expected to receive an equity stake in the AI giant when it transitions into a for-profit corporation. OpenAI is still leading the valuation race among competitors. Elon Musk’s xAI will reportedly raise $10 billion in a funding round that will value the company at $200 billion. If it secures the funds, xAI will be valued above Anthropic’s $183 billion.
Big Number
$500 billion. That is how much OpenAI could be valued following an upcoming $6 billion secondary share selloff, which could make the AI darling the world’s most valuable private company.
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