GPU behemoth Nvidia is close to finalising a $30bn investment in OpenAI that replaces the long-term $100bn commitment the pair agreed to last year, as part of a gigantic new funding round.
The world’s most valuable company is in the final stages of talks with OpenAI, and the investment could be wrapped up as early as this weekend, according to people familiar with the matter.
The $30bn equity stake is part of a larger round that is on track to raise more than $100bn and value the ChatGPT maker at $730bn, not including the new money, the people said.
OpenAI is expected to recycle much of that cash into Nvidia hardware, but the companies will not proceed with the $100bn multiyear investment partnership they announced in September.
The climbdown from September’s fanfare lands as investors get twitchy about the AI sector, a mood that has pushed US tech stocks down 17 per cent since the start of the year.
Last year’s deal was sold as a “letter of intent”, tying together two outfits at the centre of the AI boom and helping propel Nvidia above $5tn in market value a few weeks later.
It sped up Sam Altman’s dealmaking streak, with OpenAI stitching together complex arrangements with rival chipmakers AMD and Broadcom, and with cloud providers including Oracle.
The market liked it at the time, but analysts grumbled that linking suppliers, customers and investors looked circular, with bubble vibes creeping in.
Under the $100bn plan, Nvidia would have invested in 10 $10bn increments as OpenAI’s appetite for compute grew over several years, in return for a hefty stake.
OpenAI, in turn, planned to buy millions of Nvidia AI processors as it chased up to 10 gigawatts of new computing capacity.
The pact never moved from a memorandum of understanding to a proper contract. In January, the Wall Street Journal reported the deal was “on ice”.
Now it has been swapped for a simpler play, Nvidia investing up to $30bn for OpenAI stock, with that funding aimed at building out gigawatts of capacity and likely teeing up more deals later.
