Nvidia cancels $100 billion OpenAI investment after talks fail
Nvidia Corp.’s negotiations to invest as much as $100 billion in OpenAI have collapsed, according to the reports, revealing a possible divide between two of the most influential companies in the artificial intelligence sector. The discussions came to a standstill after certain individuals within Nvidia raised concerns regarding the transaction, as reported by sources. OpenAI is the creator of the widely used chatbot ChatGPT, whereas Nvidia holds a leading position in the market for AI processors that facilitate the development of such software. The companies disclosed the agreement in September, stating at that time that they had executed a letter of intent for a strategic deal. The $100 billion was intended to bolster new data centres and additional AI infrastructure, constructed with Nvidia components. They were targeting a computing power of 10 gigawatts — comparable to the peak electricity demand of New York City.
In a statement on Friday, Nvidia remarked, “We have been OpenAI’s preferred partner for the last 10 years. We look forward to continuing to work together.” The company refrained from commenting on the status of negotiations. A representative for OpenAI has not yet provided a response to the request for comment. The two sides are currently reevaluating the partnership, according to the source. In one scenario, Nvidia might allocate tens of billions of dollars as part of OpenAI’s current funding round, according to the reports.
OpenAI has been pursuing an ambitious goal of raising up to $100 billion in its latest funding round. According to a report on Thursday, Amazon.com Inc. is in discussions to invest as much as $50 billion and to broaden an existing agreement that entails providing computing power to the AI startup. Nvidia has made other notable investments in AI companies. Earlier this week, it announced plans to invest an additional $2 billion into CoreWeave Inc., a cloud computing provider that is also a customer.
The nature of these circular deals — in which a company invests in a business that purchases its product — has raised alarms regarding the sustainability of the AI boom. Nvidia Chief Executive Officer Jensen Huang has dismissed the criticism. Following the CoreWeave deal, he remarked that these investments constitute a minor fraction of the overall sum that companies will require to secure. “So the idea that it is circular is — it’s ridiculous,” he stated.
