It turns out Nvidia’s (NVDA) $5 billion investment in Intel (INTC) was just a warm up for a much bigger bet on the AI ecosystem.
Just days after investing in the struggling chipmaker, Nvidia said on Monday that it has signed a letter of intent with OpenAI to form a “landmark strategic partnership” that will see the hyperscaler deploy at least 10 gigawatts of Nvidia systems across OpenAI’s AI infrastructure.
OpenAI will be using Nvidia’s GPUs to train and run its next-generation models that aim to achieve superintelligence.
As part of the agreement, Nvidia will be investing up to $100 billion in OpenAI as the new Nvidia systems are deployed. The companies are targeting the second half of 2026 for the first phase to come online using the NVIDIA Vera Rubin platform.
“NVIDIA and OpenAI have pushed each other for a decade, from the first DGX supercomputer to the breakthrough of ChatGPT,” Nvidia founder and CEO Jensen Huang said in a statement. “This investment and infrastructure partnership mark the next leap forward — deploying 10 gigawatts to power the next era of intelligence.”
Nvidia will serve as OpenAI’s preferred strategic compute and networking partner as OpenAI pursues its AI factory growth plans.
“Compute infrastructure will be the basis for the economy of the future, and we will utilize what we’re building with NVIDIA to both create new AI breakthroughs and empower people and businesses with them at scale,” OpenAI cofounder and CEO Sam Altman said in a statement.
Huang called the project the “the biggest AI infrastructure project in history” in an interview with CNBC.
Nvidia’s GPU business is unmatched
But more than anything, this latest investment in OpenAI – and the one it made last week in Intel – shows how thoroughly Nvidia is dominating the AI space, allowing it to use its massive $4.5 trillion market cap to invest large sums in building out the ecosystem.
“The reality is while Nvidia may have viewed Intel as a meaningful competitor in the past, that is no longer the case and hasn’t been for quite a while,” D.A. Davidson analyst Gil Luria wrote last week following Nvidia’s investment in Intel. “Nvidia has captured the overwhelming majority of demand for AI compute, and is now in the process of investing in other companies around the AI ecosystem to continue accelerating the momentum of AI as a whole.”
Brian Colello, a senior equity analyst for Morningstar, notes that Nvidia’s GPUs – along with its hardware, software and networking tools –have become so vital to enabling “the exponentially growing market around artificial intelligence” that its continued growth is all but certain, even if there are occasional sector-related downturns.
“In the long run, we expect tech titans to strive to find second-sources or in-house solutions to diversify away from Nvidia in AI, but these efforts will, at best, only chip away at, but not supplant, Nvidia’s AI dominance,” Colello wrote.
Jacob Bourne, a technology analyst at Emarketer, agreed with this assessment in a client note written after Nvidia’s partnership with OpenAI was announced.
"Demand for Nvidia GPUs is effectively baked into the development of frontier AI models, and deals like this should also ease concerns about lost sales in China,” he wrote. “It also throws cold water on the idea that rival chipmakers or in-house silicon from the Big Tech platforms are anywhere close to disrupting Nvidia's lead.”
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