Nvidia's $100 billion OpenAI investment shrinks to $20 billion as chip tensions surface
19 Sources
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Five months later, Nvidia's $100 billion OpenAI investment plan has fizzled out
In September 2025, Nvidia and OpenAI announced a letter of intent for Nvidia to invest up to $100 billion in OpenAI's AI infrastructure. At the time, the companies said they expected to finalize details "in the coming weeks." Five months later, no deal has closed, Nvidia's CEO now says the $100
[2]
Nvidia nears deal to invest $20 billion in OpenAI funding round, source says
Feb 3 (Reuters) - Nvidia (NVDA.O), opens new tab is nearing a deal to invest roughly $20 billion in OpenAI as part of its latest funding round, a person familiar with the matter told Reuters on Tuesday. ChatGPT maker OpenAI is looking to raise up to $100 billion in its latest funding round,
[3]
Nvidia, OpenAI appear stalled on their mega deal. But the AI giants still need each other
Five months later, no contract has been signed and no money has changed hands. More concerning to investors, the two companies are seemingly at odds. The Wall Street Journal on Friday reported that the negotiations between the companies were "on ice" after some within Nvidia expressed doubts about
[4]
All the Messy Drama Between OpenAI and Nvidia, Explained
OpenAI and Nvidia, the two darlings of AI hype and long-term partners, seem to be having a bit of a falling out. At the center of this rift is a $100 billion Nvidia investment in OpenAI announced in September 2025. As part of the deal, Nvidia would build 10 gigawatts of AI data centers for OpenAI
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Exclusive: OpenAI is unsatisfied with some Nvidia chips and looking for alternatives, sources say
SAN FRANCISCO, Feb 2 (Reuters) - OpenAI is unsatisfied with some of Nvidia's latest artificial intelligence chips, and it has sought alternatives since last year, eight sources familiar with the matter said, potentially complicating the relationship between the two highest-profile players in the AI
[6]
What does the disappearance of a $100bn deal mean for the AI economy?
Apparent collapse of Nvidia-OpenAI tie-up raises questions about circular funding and who will bear the cost of AI's expansion Did the circular AI economy just wobble? Last week it was reported that a much-discussed $100bn deal - announced last September - between Nvidia and OpenAI might not be
[7]
Nvidia describes OpenAI as one of most consequential companies ever
Nvidia will invest heavily in OpenAI despite not specifying exact figures Nvidia chief executive Jensen Huang rejected claims that the company was pulling back from OpenAI. "It's nonsense," he said speaking to reporters during a recent visit to Taipei, describing OpenAI as "one of the most
[8]
Uh Oh... Nvidia's $100 Billion Deal With OpenAI Has Fallen Apart
AI chipmaker Nvidia has been at the center of the enormous AI hype wave that has gripped global markets, ascending to become the most valuable company in the world. Yet despite its dominating presence on Wall Street, OpenAI is getting cold feet about the company's offerings. After announcing a
[9]
OpenAI reportedly isn't happy with Nvidia's GPUs while Nvidia's $100 billion investment plan in OpenAI is said to have 'stalled': Is the AI honeymoon over?
OpenAI reportedly isn't happy with the performance of Nvidia's GPUs. Meanwhile, Nvidia is having second thoughts about pumping $100 billion into OpenAI. These are the latest rumours around the two biggest players in AI. So, could their unholy alliance be faltering? Last week, the Wall Street
[10]
Nvidia nears deal to invest $20 billion in OpenAI funding round: Report
Nvidia CEO Jensen Huang told CNBC earlier in the day that the company would consider investing in OpenAI's next fundraising round and the startup's eventual IPO, following recent reports that the deal had stalled. Nvidia is nearing a deal to invest roughly $20 billion in OpenAI as part of its
[11]
Nvidia Reportedly Nears Record $20 Billion OpenAI Investment As Jensen Huang And Sam Altman Deny Reports Of Strained Partnership - Amazon.com (NASDAQ:AMZN), NVIDIA (NASDAQ:NVDA)
Jensen Huang-led Nvidia Corp (NASDAQ:NVDA) is reportedly planning to invest $20 billion in ChatGPT-maker OpenAI. Nvidia's Biggest Bet Yet On The AI Boom As part of OpenAI's latest funding round, Nvidia is close to finalizing a $20 billion investment in the AI startup, reported Bloomberg on
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The NVIDIA-OpenAI Fiasco Isn't About Compute, It's About Control; Here's How One of the World's Biggest AI Partnerships Is Playing Out
NVIDIA and OpenAI are all that's being talked about in the AI world, not because there have been changes in their commitments, but because the scale of the partnership is so immense that it captures all the market spotlight. Before we dive into the ongoing NVIDIA-OpenAI fiasco, it's important to
[13]
OpenAI seeks alternatives to Nvidia for AI inference, testing chipmaker's dominance
OpenAI is unsatisfied with some of Nvidia's latest artificial intelligence chips, and it has sought alternatives since last year, eight sources familiar with the matter said, potentially complicating the relationship between the two highest-profile players in the AI boom. The ChatGPT-maker's shift
[14]
OpenAI is unsatisfied with some Nvidia chips and looking for alternatives, sources say
The ChatGPT-maker's shift in strategy, the details of which are first reported here, is over an increasing emphasis on chips used to perform specific elements of AI inference, the process when an AI model such as the one that powers the ChatGPT app responds to customer queries and
[15]
Why OpenAI is Unhappy with Some Nvidia Chips and Searching for Alternatives - NVIDIA (NASDAQ:NVDA)
OpenAI is exploring alternatives to some of NVIDIA Corp's (NASDAQ:NVDA) latest AI chips, potentially altering the dynamics between two key players in the AI sector. This strategic move by OpenAI highlights the company's focus on improving AI inference performance, essential for applications like
[16]
What's Up With OpenAI and Nvidia? Conflicting Signals About the $100 Billion Deal Emerge
On the one hand Jensen Huang has committed to investment more in OpenAI, but Sam Altman seems to be looking elsewhere for AI chips Are we witnessing the first signs of discord in the AI universe built on a bubble of circular investments and mutual admiration. If media reports are to be believed,
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Sam Altman Pushes Back On Report Claiming OpenAI Unhappy With Jensen Huang-Led Company's AI Chips Alternatives: 'Love' Working With Nvidia - Advanced Micro Devices (NASDAQ:AMD), Broadcom (NASDAQ:AVGO)
On Monday, OpenAI CEO Sam Altman reaffirmed his company's close ties with Nvidia Corp (NASDAQ:NVDA) after a report suggested the AI startup was dissatisfied with some of the chipmaker's latest offerings and exploring alternatives. Altman Rejects Report, Reaffirms Nvidia Ties Altman addressed the
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Nvidia nears $20 bln OpenAI investment in latest funding round - Bloomberg By Investing.com
Investing.com-- Nvidia (NASDAQ:NVDA) is close to finalising a roughly $20 billion investment in OpenAI as part of the ChatGPT maker's latest funding round, Bloomberg News reported on Tuesday, citing people familiar with the matter. The deal, which would mark Nvidia's largest-ever single
[19]
OpenAI is unsatisfied with some Nvidia chips and looking for alternatives, sources say
SAN FRANCISCO, Feb 2 (Reuters) - OpenAI is unsatisfied with some of Nvidia's latest artificial intelligence chips, and it has sought alternatives since last year, eight sources familiar with the matter said, potentially complicating the relationship between the two highest-profile players in the AI
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Five months after announcing plans for a $100 billion investment, Nvidia and OpenAI's mega-deal has stalled. The chipmaker now plans a $20 billion investment instead, while OpenAI quietly pursues alternative chip providers. The tension centers on inference performance issues, with OpenAI reportedly dissatisfied with Nvidia's GPU speed for coding tasks, prompting deals with Cerebras and AMD to reduce dependency.
Nvidia OpenAI Deal Shrinks From $100 Billion to $20 Billion
What was supposed to be one of the AI industry's most ambitious partnerships has hit significant turbulence. In September 2025, Nvidia and OpenAI announced a letter of intent for Nvidia investment of up to $100 billion in OpenAI's AI infrastructure, promising 10 gigawatts of computing capacity requiring power output equal to roughly 10 nuclear reactors
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. Five months later, the stalled investment deal has been dramatically scaled back, with Nvidia now nearing a deal to invest roughly $20 billion in OpenAI's latest OpenAI funding round, which values the ChatGPT maker at about $830 billion2
.The collapse of the original plan represents a significant shift in the Nvidia and OpenAI relationship, which has been central to the AI race among tech giants. Jensen Huang, Nvidia's CEO, now says the $100 billion figure was "never a commitment" and told reporters in Taiwan that Nvidia would "invest one step at a time"
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. Despite the scaled-back investment, Huang told CNBC that Nvidia would "make a huge investment in OpenAI" and described it as "probably the largest investment we've ever made," though he clarified it would be "nothing like" $100 billion3
.OpenAI Seeks Alternative Chip Providers Over Performance Concerns
Behind the stalled negotiations lies a more fundamental issue: OpenAI's dissatisfaction with Nvidia's inference performance. According to eight sources familiar with the matter, OpenAI is unsatisfied with the speed of some Nvidia AI chips for inference tasks—the process by which a trained AI model generates responses to user queries
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. The issue became particularly visible in OpenAI's Codex, an AI code-generation tool, where OpenAI staff attributed some of the product's performance limitations to Nvidia's GPU-based hardware1
.This technical friction has prompted OpenAI to actively reduce its reliance on Nvidia by pursuing alternative chip providers. The company has discussed working with startups Cerebras and Groq, both of which build AI chips designed to reduce inference latency
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. In January, OpenAI announced a $10 billion deal with Cerebras, adding 750 megawatts of computing capacity for faster inference through 20281
. Sachin Katti, who joined OpenAI from Intel in November to lead compute infrastructure, said the partnership adds "a dedicated low-latency inference solution" to OpenAI's platform.OpenAI has also struck an agreement with AMD in October for six gigawatts of GPUs and announced plans with Broadcom to develop custom AI chips to further diversify its hardware supply
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. Seven sources told Reuters that OpenAI needs new hardware that would eventually provide about 10% of the company's inference computing needs5
.AI Chip Market Dominance Faces New Competition
The tension between these AI giants signals a broader shift in AI chip market dominance, particularly as inference becomes increasingly critical. Nvidia's graphics processing chips excel at the massive data crunching necessary to train large AI models, but AI advancements increasingly focus on using trained models for inference and reasoning
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. Inference requires more memory than training because chips need to spend relatively more time fetching data from memory than performing mathematical operations, and Nvidia and AMD GPU technology relies on external memory, which adds processing time5
.Competing products such as Anthropic's Claude and Google's Gemini benefit from deployments that rely more heavily on chips Google made in-house, called tensor processing units (TPUs), which are designed for the sort of calculations required for inference
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. The Wall Street Journal reported that Jensen Huang has been privately criticizing what he described as a lack of discipline in OpenAI's business approach and has expressed concern about the competition OpenAI faces from Google and Anthropic1
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Why This Matters Despite Public Reassurances
Despite the friction, both companies have attempted to smooth things over publicly. Sam Altman, OpenAI's CEO, posted on X: "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"
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. Yet the underlying dynamics reveal deeper concerns about the AI industry's financial structure and competitive landscape.The original deal sparked concerns about circular dealmaking—Nvidia invests $100 billion in OpenAI, which then uses those funds to lease Nvidia chips. Tech critic Ed Zitron has been critical of Nvidia's circular investments, which touch dozens of tech companies that are also all Nvidia customers
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. The scaled-back investment and OpenAI's pursuit of alternative suppliers suggest both companies are hedging their bets in an increasingly competitive market.Nvidia shares fell about 1.1 percent on Monday following reports of the stalled deal
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. Companies including Amazon and SoftBank Group Corp are racing to forge partnerships with OpenAI, betting that closer ties with the artificial-intelligence startup would give them a competitive edge in the AI race2
. As OpenAI pursues a valuation of over $800 billion ahead of a rumored IPO later this year, the company's ability to secure diverse hardware partnerships while maintaining its relationship with Nvidia will be critical to watch4
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