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Nvidia on Monday announced a $100 billion investment in OpenAI as the two firms partner up on a huge AI infrastructure push.
Jensen Huang, chief executive of Nvidia, told CNBC that the deal includes at least 10 gigawatts worth of data centers — enough to power between 4 million and 5 million graphics processing units, which is the entire amount the company will ship this year and “twice as much as last year.”
That’s roughly the amount of energy needed for the entirety of New York City on a hot summer day, according to the Mayor’s Office of Climate and Environmental Justice.
The partnership between Nvidia and OpenAI – which was recently valued at $500 billion – is “monumental in size,” Huang added.
Shares in Nvidia jumped nearly 4% on Monday.
OpenAI will pay Nvidia in cash for chips, while Nvidia will invest in the startup for non-controlling shares, a person familiar with the matter told Reuters.
The investment will be made gradually, with the first gigawatt of Nvidia systems to be deployed in the second half of 2026, the companies said in a press release.
OpenAI and Nvidia have been closely tied throughout the rise of AI tech adoption.
Demand for Nvidia’s chips soared after OpenAI launched its uber-popular chatbot ChatGPT in 2022, which was developed using the firm’s GPUs.
Nvidia will serve as a “preferred strategic compute and networking partner for its AI factory growth plans,” the companies said in a statement.
And OpenAI will require a massive amount of computing power to generate advanced, next-generation AI models.
The company is already in need of an increasing number of chips to serve its rapidly-expanding user base, which has hit 700 million active weekly users.
“You should expect a lot from us in the coming months,” OpenAI CEO Sam Altman told CNBC.
“There are three things that OpenAI has to do well: we have to do great AI research, we have to make these products people want to use, and we have to figure out how to do this unprecedented infrastructure challenge.”
Nvidia’s investment comes just days after it pledged $5 billion to struggling chipmaker Intel, following up the White House’s massive stake in the company.
The company also backed OpenAI in a $6.6 billion funding round in October 2024. It’s possible that the back-to-back investment could draw antitrust scrutiny.
OpenAI, meanwhile, recently announced that it has signed a deal that will allow it to shift into a for-profit company – despite lawsuits from Elon Musk attempting to stop the restructuring.
While Nvidia largely dominates the AI chip market, it is facing heated competition from rivals like Advanced Micro Devices, which is based in Santa Clara, Calif., and cloud providers that have started developing their own chips.
AI infrastructure is also incredibly costly. During an investor call in August, Huang said it costs between $50 billion to $60 billion to build just one gigawatt worth of data center capacity. About $35 billion of that cost goes toward Nvidia chips and systems.
The companies said Monday that the massive deal would complement its work with Microsoft, Oracle and Softgate on the $500 billion Trump-backed Stargate project, which aims to create the world’s most advanced AI infrastructure in the US.
With Post wires