The $100 Billion Megadeal Between OpenAI and Nvidia Is on Ice
Nvidia’s NVDA plan to invest up to $100 billion in OpenAI to help it train and run its latest artificial-intelligence models has stalled after some inside the chip giant expressed doubts about the deal, people familiar with the matter said.
The companies unveiled the giant agreement last September at Nvidia’s Santa Clara headquarters. They announced a memorandum of understanding for Nvidia to build at least 10 gigawatts of computing power for OpenAI, and the chip-maker also agreed to invest up to $100 billion to help OpenAI pay for it. As part of the deal, OpenAI agreed to lease the chips from Nvidia.
At the time, the ChatGPT-maker expected the deal negotiations to be completed in the coming weeks, people familiar with the plans said. But the talks haven’t progressed beyond the early stages, some of the people said.
Now, the two sides are rethinking the future of their partnership, some of the people said. The latest discussions, they said, include an equity investment of tens of billions of dollars as part of OpenAI’s current funding round.
Nvidia CEO Jensen Huang has privately emphasized to industry associates in recent months that the original $100 billion agreement was nonbinding and not finalized, people familiar with the matter said. He has also privately criticized what he has described as a lack of discipline in OpenAI’s business approach and expressed concern about the compe ion it faces from the likes of Google and Anthropic, some of the people said.
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In a joint announcement unveiling the September deal with Altman and OpenAI President Greg Brockman, Huang called the deal “the largest computing project in history.” Nvidia’s stock rose by nearly 4% on the news, pushing its market value to almost $4.5 trillion. As part of the deal, Nvidia discussed guaranteeing some of the loans OpenAI planned to take out to build its own data centers, The Wall Street Journal previously reported.
OpenAI went on to sign a string of other agreements with chip and cloud companies that helped fuel a global stock market rally. But investors have since grown jittery about the startup’s ability to pay for these deals, leading to a sell-off in some tech stocks tied to OpenAI. Altman has said that the deals put the startup on the hook for $1.4 trillion in computing commitments—more than 100 times the revenue it was on pace to generate last year.
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