Nvidia nears $30B investment in OpenAI, ditches earlier plan: report

Nvidia is close to finalising a $30 billion investment in OpenAI as part of a massive new financing round that could raise more than $100 billion and value the ChatGPT developer at $730 billion before new capital, reported Financial Times, citing people familiar with the negotiations.

The investment would replace a previously announced long-term $100 billion partnership between the two companies that never progressed beyond a memorandum of understanding.

The agreement could be concluded as early as this weekend, said the report.

The revised structure reflects a shift toward a more straightforward equity investment, while still preserving the close commercial relationship between the companies that sit at the center of the artificial intelligence boom.

Revised deal replaces earlier $100bn partnership

Under the earlier agreement announced last September, Nvidia planned to invest in ten increments of $10 billion as OpenAI’s computing demand increased over several years, in exchange for a significant equity stake.

In return, OpenAI intended to purchase millions of Nvidia’s processors to support plans to deploy up to 10 gigawatts of new computing capacity.

However, the deal never moved beyond a letter of intent.

Reports earlier this year suggested the arrangement had stalled, and it has now been replaced by the proposed $30 billion equity investment.

OpenAI is expected to reinvest much of the new capital into Nvidia hardware to expand computing capacity.

The shift comes amid broader investor unease about artificial intelligence valuations, with US technology stocks down about 17% since the start of the year.

The earlier partnership had tightly linked suppliers, customers, and investors across the AI sector, prompting some analysts to question whether the structure risked creating a bubble.

Massive funding round draws strategic investors

The Nvidia investment forms part of a broader fundraising effort involving several large strategic partners. SoftBank is also in final negotiations to invest $30 billion, while Amazon could contribute up to $50 billion through a partnership tied to the use of OpenAI models.

Other potential backers include Abu Dhabi’s state-backed MGX fund and Microsoft, with additional venture capital investors also being approached.

OpenAI has told investors it intends to spend roughly $600 billion on computing resources between now and 2030 across providers including Nvidia, Amazon, and Microsoft.

The company believes securing computing infrastructure and electrical power will be critical to defending its position against competitors.

Its dealmaking activity over the past year has also included arrangements with AMD, Broadcom, and Oracle as it expands access to chips and cloud capacity.

Companies emphasize ongoing partnership

Executives from both companies have sought to underline the strength of their ties despite the reports of earlier deal not progressing.

“We love working with Nvidia and they make the best AI chips in the world. We hope to be a gigantic customer for a very long time,” OpenAI chief executive Sam Altman said on X earlier this month.

Nvidia chief executive Jensen Huang similarly dismissed concerns about friction, telling CNBC that any suggestion of “controversy” was “nonsense”. “We love working with OpenAI,” he said.

OpenAI’s annualised revenue has surpassed $20 billion and has expanded alongside increased access to computing power, with both measures roughly tripling each year.

The company argues that access to large-scale infrastructure will be the key competitive advantage as demand for artificial intelligence tools continues to grow.