Nvidia and OpenAI have sealed an extraordinary $100 billion partnership, bringing to a conclusive peak one of the most impactful partnerships in the tech sector history. Nvidia CEO Jensen Huang and OpenAI CEO Sam Altman were the principal negotiators. They hosted virtual roundtables and organized individual meetings to move their process along. In fact, we’ve heard that Nvidia will invest $100 billion in OpenAI over the next five years. In exchange, OpenAI has committed to purchasing $300 billion worth of computing power from Oracle over that period.
For Huang, the partnership is “monumental in size.” He called particular attention to its importance in determining the future of AI development. This combination will enable both firms to accelerate the development of next-generation distributed AI infrastructure. They’re setting an ambitious cross-island 10-gigawatt buildout. The initial one of these sites should be up and running by the second half of next year.
This partnership is about more than money — it’s a strategic collaboration to push the future of AI forward. Under contract to Nvidia, OpenAI made news recently with a major and quite remarkable collaboration. They will announce nine funding windows, with each window set at $10 billion. Each round will be at a price dictated by the companies valuations as new capacity is added.
In October 2022, Nvidia made the unprecedented move of participating in a $6.6 billion funding round for OpenAI. This investment increased OpenAI’s valuation to a staggering $157 billion. This prior investment makes an impressive foundation for the current partnership and further exemplifies Nvidia’s tireless dedication to propelling OpenAI’s lofty ideals.
Huang and Altman previously teamed up during President Donald Trump’s state visit to the U.K., highlighting their longstanding relationship and collaborative spirit. The new agreement builds on that foundation. Doing so would enable and empower both leaders to leverage their unique strengths in AI research (the US) and infrastructure development (the EU).
To its credit, OpenAI quickly filled Microsoft in on the deal. They only notified their principal shareholder and main cloud provider one day before executing the deal. This advance notice represents a critical opportunity to stress the need for transparency and collaboration among all the key stakeholders in this transformative project.
Altman articulated the essential responsibilities of OpenAI moving forward, stating, “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.” His comments underscore the lofty expectations OpenAI has established for itself as it begins this exciting new phase in its short existence.
The relationship between Nvidia and OpenAI isn’t only financial. Understood this way, it is a historic, unprecedented step to change the landscape of artificial intelligence. As the two companies continue their race to reach their common goals, the effect on the tech industry is massive. With those investments in computing power and infrastructure, they are well poised to lead the charge in innovative AI solutions.