Nvidia’s $100 Billion OpenAI Deal Sparks Strategic and Financial Questions

Nvidia’s announcement of a $100 billion investment in OpenAI has generated significant attention in the tech industry, highlighting both the potential and uncertainties surrounding this landmark partnership. The deal is aimed at strengthening OpenAI’s AI infrastructure through the deployment of advanced AI chips in large-scale data centers, but several details remain unclear.

Under the agreement, Nvidia plans to provide millions of its next-generation chips and invest up to $100 billion to support OpenAI’s AI operations. The initial phase involves a $10 billion commitment to deploy one gigawatt of data center capacity, utilizing Nvidia’s Vera Rubin chips, with construction expected to begin in the latter half of 2026. This deployment reflects the growing demand for AI computing power and the strategic importance of AI chips in global technology development.

However, questions about funding remain. Nvidia’s CEO Jensen Huang has noted that building one gigawatt of AI data center capacity costs roughly $50 billion, with $35 billion allocated for Nvidia equipment. How the remaining $40 billion per gigawatt will be sourced has not been disclosed, leaving stakeholders uncertain about the project’s financial structure.

OpenAI’s current organizational setup as a non-profit adds another layer of complexity. The deal’s scale and commercial objectives may not align with the non-profit model, and there is no clear indication that OpenAI intends to transition to a for-profit structure. This raises concerns about governance, long-term sustainability, and the management of such a massive investment.

Additionally, Nvidia’s investment terms are not fully clarified. OpenAI’s reported $500 billion valuation raises questions about whether Nvidia will receive equity stakes, profit-sharing arrangements, or other compensation, and whether valuations will be adjusted over time.

Despite these uncertainties, the deal underscores the strategic race to dominate AI infrastructure. Both companies are navigating uncharted territory, and the outcomes of this partnership will likely have far-reaching implications for the future of AI development, investment, and commercialization globally.