The news: Nvidia will invest up to $100 billion in OpenAI in $10 billion stages and supply the processors for 10 gigawatts of new AI data centers—an energy load equal to New York City’s peak demand or enough to power 7 million to 9 million US homes, per CNBC.
Nvidia’s market cap rose $177 billion on the news Tuesday. The hardware giant is effectively funding its biggest customer, with money cycling back to its own balance sheet—critics call it engineered growth rather than organic demand.
Why it’s worth watching: The deal tightens Nvidia’s grip on AI infrastructure while giving OpenAI a runway for training next-gen models. However, since the first gigawatt isn’t expected online until late 2026, the deal may have little short-term impact on demand or revenues.
What it means for OpenAI:
What it means for Nvidia:
Consolidating power: In 2023, 22% of business leaders expected OpenAI to be a generative AI leader in 3 to 5 years. That rose to 28% in 2024. Nvidia, meanwhile, doubled its standing—up from 7% in 2023 to 14% in 2024, per Wharton School of Business and GBK Collective. Their growing interdependence bolsters their dominance but squeezes rivals.
Our take: Nvidia’s bet on OpenAI signals a deeper shift—Big Tech is locking arms to secure control of the AI future. These alliances blur the lines between investor, supplier, and customer, concentrating power among a few giants.
If the project delivers, Nvidia’s dominance grows. If not, the “Stargate effect” looms—ambitious AI ventures that overpromise and underdeliver.