Nvidia's $100 Billion OpenAI Ambition Hits Pause: Internal Scrutiny Over Deal Scope and Rivalry Fears
Nvidia's blockbuster plan to funnel as much as $100 billion into artificial intelligence pioneer OpenAI has hit significant internal headwinds, casting doubt on one of the most anticipated partnerships in the tech industry, The Wall Street Journal reported Friday.
The proposed investment, first floated in September, was seen as a masterstroke to cement the symbiotic relationship between the chipmaking titan and the creator of ChatGPT. It aimed to bankroll OpenAI's massive data center expansion while guaranteeing its access to Nvidia's coveted AI processors.
However, sources indicate the deal is now under rigorous reassessment. Discussions have pivoted toward a substantially smaller equity commitment—potentially in the tens of billions—as part of OpenAI's current funding round. This recalibration follows concerns among Nvidia's leadership about the original deal's vast scope and financial architecture.
In a statement to Benzinga, an Nvidia spokesperson reaffirmed the company's long-standing partnership with OpenAI but declined to comment on specific negotiations. OpenAI did not immediately respond to requests for comment.
Behind the scenes, Nvidia CEO Jensen Huang has characterized the initial $100 billion figure as a non-binding proposal. He has privately voiced unease about what he perceives as a lack of financial discipline at OpenAI, which is reportedly burning through more than $17 billion annually to support its compute-intensive models. Huang has also pointed to the intensifying competitive pressure from well-funded rivals like Google's Gemini and Amazon-backed Anthropic.
The pause comes at a critical juncture for OpenAI, which is reportedly seeking to raise up to $100 billion at a staggering valuation of approximately $830 billion. Despite announcing an annualized revenue run rate exceeding $20 billion for 2025—a meteoric rise—its subscription income alone may not cover its colossal operational costs, forcing it to seek deep-pocketed allies.
Other tech giants are circling. Amazon is reportedly in talks to invest up to $50 billion, while SoftBank and others are vying for strategic stakes, viewing alignment with OpenAI as a crucial edge in the global AI arms race.
Market Voices
David Chen, Tech Portfolio Manager at Horizon Capital: "This is prudent capital allocation. A $100B check is unprecedented, even for Nvidia. Scaling it back allows them to maintain strategic influence without over-concentrating risk, especially as the AI competitive landscape fragments."
Maya Rodriguez, AI Research Lead at Stanford University: "The hesitation underscores a fundamental tension. Hardware leaders want their partners to scale, but not so recklessly that it destabilizes the ecosystem or fuels rivals. It's a delicate dance between collaboration and containment."
Frank Kellerman, Veteran Tech Analyst: "This smells like cold feet. Huang built an empire on AI hype, and now he's balking at the price tag? If Nvidia doesn't step up, Amazon or others will. This dithering could cost them the pole position in defining the next decade of AI."
Priya Sharma, Startup Founder & Former OpenAI Engineer: "The 'financial discipline' critique is rich, coming from a company whose valuation is built on the very infrastructure spend they're criticizing. OpenAI's burn is R&D for the frontier. You can't penny-pinch your way to AGI."
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