Nvidia, currently the globe’s most valuable publicly traded company, declared on Monday its intention to inject a colossal $100 billion into OpenAI. This landmark agreement is set to provide the San Francisco-based startup, renowned for its generative AI powerhouse ChatGPT, with Nvidia’s cutting-edge artificial intelligence semiconductors, crucial for powering its data center infrastructure.
This substantial investment highlights a growing trend where OpenAI secures funding from key companies within its own supply chain for products and services. A prime example is Microsoft, which invested $10 billion in OpenAI in 2023 and has since reaped billions by providing the startup with computing power through its Azure data centers.
Nvidia had previously invested in OpenAI last year. During a Monday appearance on CNBC, Jensen Huang, Nvidia’s chief executive, confirmed that his company is committed to supporting what will be the largest data center build-out in history, projecting sales of four to five million Nvidia chips to OpenAI as a direct result.
(Image Caption: An aerial view illustrates the ongoing construction of a vast data center, a collaborative effort between three major tech entities—OpenAI, SoftBank, and Oracle—located in Abilene, Texas.)
This particular investment is distinct from OpenAI’s most recent funding round, which has been spearheaded by the Japanese conglomerate SoftBank. That extensive fundraising initiative is anticipated to channel $40 billion into the AI startup, potentially elevating the company’s valuation to $300 billion. Other notable investors in this round include industry giants like Microsoft, Thrive Capital, Coatue, and Altimeter.
Furthermore, OpenAI is currently in discussions to facilitate the sale of $6 billion worth of shares held by its current and former employees. If successful, this secondary sale could push the company’s valuation to approximately $500 billion.
In a bold move earlier in January, OpenAI, alongside its partners SoftBank and cloud computing powerhouse Oracle, joined former President Trump in unveiling plans to allocate up to $500 billion towards new data center infrastructure across the United States. Under this ambitious initiative, dubbed Project Stargate, the consortium has already established a data center in Abilene, Texas, with intentions to construct additional facilities in various regions nationwide.
(It is worth noting that The New York Times initiated legal action against OpenAI and Microsoft in 2023, alleging copyright infringement of its news content in relation to AI systems. Both companies have consistently refuted these claims.)
This is a developing story. Please check back for further updates.