Nvidia pours $100 billion into OpenAI and supplies millions of chips, raising fresh questions about competition and market concentration

Nvidia commits $100 billion to OpenAI while reinforcing demand for its hardware
Partnership builds massive data centers and fuels concerns over circular investment structures
Analysts warn deal may raise antitrust scrutiny as Nvidia strengthens AI dominance

Following its recent surprise $5 billion Intel deal, Nvidia is spending big again, this time committing up to $100 billion to OpenAI alongside supplying millions of its chips.

The move fits a broader pattern in which Nvidia channels money into businesses that rely on its own hardware, from $6.3 billion in CoreWeave to $700 million in nScale, effectively reinforcing demand for its products while bypassing hyperscalers like Google and Microsoft which are racing to reduce their dependence on Nvidia’s hardware.

This latest investment into the world’s best-known AI firm immediately lifted Nvidia’s market value by more than $220 billion.

Circular structure

The deal involves a circular structure and will see Nvidia will buy non-voting shares in OpenAI, which OpenAI will then spend mostly on Nvidia systems.

Citing people familiar with the matter, Reuters says the partnership will begin with a $10 billion investment and scale as OpenAI deploys more computing power.

“This is the biggest AI infrastructure project in history,” Nvidia founder and CEO Jensen Huang said in an interview with CNBC’s Jon Fortt. “This partnership is about building an AI infrastructure that enables AI to go from the labs into the world.”

He said the companies will build data centers capable of running next-generation AI models, powered by Nvidia’s new Vera Rubin platform.

The first data centers are due online in 2026 and require 10 gigawatts of power, roughly equal to the needs of 8 million US households.

OpenAI chief executive Sam Altman said the capacity was essential for the company’s ambitions.

“Building this infrastructure is critical to everything we want to do,” Altman said. “This is the fuel that we need to drive improvement, drive better models, drive revenue, drive everything.”

Analysts welcomed the long-term demand for Nvidia’s products but warned about the structure of the deal.

“On the one hand this helps OpenAI deliver on some very aspirational goals for compute infrastructure,” said Stacy Rasgon of Bernstein. “On the other hand the ‘circular’ concerns have been raised in the past, and this will fuel them further.”

Kim Forrest, Chief Investment Officer, Bokeh Capital also sounded a note of caution. “This sounds like Nvidia is investing in its largest customer. These arrangements can be beneficial for both parties. But there can be dangers as well. Being totally linked with each other can cause for short-sightedness and can make an entry point for other chip competitors to come into other AI companies and woo them,” she said.

MarketScreener quotes Rebecca Haw Allensworth, an antitrust professor at Vanderbilt Law School, who says there are concerns that Nvidia could favor OpenAI with better pricing or faster delivery times.

“They’re financially interested in each other’s success,” she said. “That creates an incentive for Nvidia to not sell chips to, or not sell chips on the same terms to, other competitors of OpenAI.”