Quick overview

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Nvidia plans to invest up to $100 billion in OpenAI to support the development of new data centers and other artificial intelligence infrastructure.

This partnership has been positively received by investors, posting a 4% increase in Nvidia’s stock during trading in New York. The stock has now risen by approximately 37% this year, solidifying Nvidia’s position as the most valuable company.  OpenAI is currently the largest tech startup globally.

This historic agreement underscores the increasing demand for AI tools like ChatGPT and the significant processing power required to operate them.

The companies announced that they had signed a letter of intent for a strategic deal. With Nvidia’s advanced chips, OpenAI will be able to build data centers with a minimum power capacity of 10 gigawatts, which will be utilized for training and running AI models. According to sources familiar with the situation, the funding will be disbursed in installments, with the first $10 billion expected upon finalization of the agreement.

These sources, who requested anonymity due to the confidential nature of the discussions, indicated that Nvidia’s investment will also include acquiring a stake in OpenAI.

The two companies are leading a global initiative to establish data centers for the next generation of artificial intelligence tools, a project anticipated to cost trillions of dollars. This endeavor requires substantial amounts of electricity, servers, cooling systems, and advanced chips. To put it into perspective, 10 gigawatts is equivalent to New York City’s peak electricity demand, indicating the vast scale of the Nvidia-OpenAI project. “With the deployment of 10 gigawatts to power the next era of intelligence, this investment and infrastructure partnership represents a significant leap forward,” stated Jensen Huang, CEO of Nvidia.