Nvidia will invest $100 billion in OpenAI and OpenAI will build and deploy at least 10 gigawatts of AI data centers with Nvidia.

10 gigawatts! Great Scott! 😉 That’s twice as much computing power as what OpenAI was planning with Microsoft last year!

As reported by Reuters (Nvidia to invest $100 billion in OpenAI as AI datacenter competition intensifies, available here), the move underscores the increasingly overlapping interests of the various tech giants developing advanced AI systems. The deal gives Nvidia a financial stake in OpenAI, which is already an important customer.

The investment gives OpenAI the cash and access it needs to buy advanced chips it needs in the first place to maintain its dominance in an increasingly competitive landscape.

The deal will involve two separate but intertwined transactions, according to a person close to OpenAI. The startup will pay Nvidia in cash for chips, while Nvidia will invest in OpenAI for non-controlling shares, the person said.

The two companies signed a letter of intent to deploy at least 10 gigawatts of Nvidia systems for OpenAI’s AI infrastructure and said they aim to finalize partnership details in the coming weeks.

Nvidia shares rose as much as 4.4% after the announcement to a record intraday high, while Oracle gained about 5%. Oracle is working with OpenAI, SoftBank and Microsoft on the $500 billion Stargate project, a plan to build massive AI data centers around the world. Hey, another boost for Oracle – perhaps Larry Ellison is once again the richest person in the world? 🤔

The first $10 billion of Nvidia’s investment will begin once the two sides reach a definitive agreement for OpenAI to purchase Nvidia systems. OpenAI was most recently valued at $500 billion; Nvidia almost $4.5 trillion.

Yeah, I think they can afford this investment. 😉

So, what do you think? Are you surprised that OpenAI and Nvidia have announced such a lucrative agreement? Where does that leave Microsoft? Please share any comments you might have or if you’d like to know more about a particular topic.

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