Nvidia emphasizes that its collaboration with OpenAI will not affect other customers. The chip company is responding to concerns that arose after the announcement of a letter of intent to invest in a massive expansion of AI infrastructure together with OpenAI.
The deal was first reported on by Bloomberg. The agreement has a potential value of $100 billion. It revolves around the construction of data centers equipped with Nvidia hardware. Together, these installations are expected to provide at least ten gigawatts of computing power, comparable to the peak electricity demand of a city like New York. In doing so, the partners are laying the foundation for the next generation of artificial intelligence.
The investment will be made in phases. Upon signing the contract, the first $10 billion will be made available. Additional capital will be added in subsequent steps for each new gigawatt of operational capacity. Nvidia will make most of the investment in cash. In exchange, the company will receive a stake in OpenAI.
According to Nvidia, this investment will not change the way the company serves its customers. In a statement, the company said that every customer remains its top priority, regardless of any stake or collaboration.
Nvidia posts record sales
Demand for Nvidia chips has grown explosively in recent years. Data center operators, especially in Silicon Valley, are trying to get their hands on as many chips as possible. This run on hardware has led to record sales and a market value that is now approaching $4.5 trillion.
Despite this position, Nvidia is still dependent on a limited group of large customers, including Microsoft, Meta, Amazon, and Google’s parent company Alphabet. These companies are fiercely competing to build the fastest and most powerful AI infrastructure. At the same time, they are looking for ways to be less dependent on Nvidia. For example, they are working on their own components or looking at alternatives from competitors such as AMD.
OpenAI has since grown into the world’s largest tech startup, with its products being used by hundreds of millions of people every week. That success is accompanied by enormous demand for computing power, which has led to bottlenecks in the past when launching new products. With Nvidia’s capital injection, the company wants to secure the necessary infrastructure to enable further growth and develop new applications.
The deal strengthens Nvidia’s position at the heart of the AI revolution. However, the company must balance entering into strategic partnerships with maintaining the trust of the broader customer base on which its revenue depends.