NVIDIA is close to finalising a deal to invest $30 billion in OpenAI. The chip manufacturer will become the largest stakeholder in one of their primary customers, according to a source.
The investment is part of a fundraising effort in which OpenAI is seeking over $100 billion in investments, the source said. If successful, Sam Altman’s firm will be valued at approximately $830 billion, and this could become one of the largest private capital fundraisers in history.
Financial Times reports that this new funding round could be finalised as early as this weekend.
According to a previous report by Reuters, Amazon and SoftBank Group will also be investing in this fundraising round.
Drop In U.S. Tech Stocks
This will replace a previous commitment announced in September last year, under which NVIDIA, led by Jensen Huang, had planned to invest $100 billion to support OpenAI ’s use of its chips in data centres, according to the Financial Times report from Thursday.
The chip manufacturer initially planned to invest $10 billion once both companies reached a conclusive agreement where OpenAI would purchase NVIDIA systems. However, the agreement was taking much longer than expected, the source stated.
The companies have decided against proceeding with the $100 billion multi-year investment partnership. NVIDIA’s backing out of the previous agreement raised concerns from major investors about the future of the AI industry and triggered a 17% drop in U.S. tech stocks since the start of this year.
OpenAI plans to reinvest a majority of the capital to purchase NVIDIA hardware, which will power the training and deployment of artificial intelligence models.
This investment highlights the increasingly intertwined relationships between major technology companies rushing to develop advanced AI systems and language models. Chip suppliers, cloud providers, and model developers are moving to deepen strategic and financial ties.
(with inputs from Reuters)
