Nvidia Plans to Invest Up to $100 Billion in OpenAI. It May Be Why Broadcom Stock Is Falling.

Nvidia’s CEO Jensen Huang said the partnership will deploy at least 10 gigawatts of Nvidia AI systems to train and run OpenAI’s next-generation AI models. (PATRICK T. FALLON/AFP via Getty Images)

Key Points

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• Nvidia plans to invest up to $100 billion in OpenAI to support the expansion of AI data center capacity.
• The partnership intends to deploy at least 10 gigawatts of Nvidia AI systems to train OpenAI’s next-generation AI models.
• Nvidia shares rose 3.4% following the partnership news, while Broadcom stock fell 0.4%.

Nvidia is betting big on OpenAI.

On Monday, the leading maker of artificial intelligence chips announced a new partnership with OpenAI. Nvidia said it plans to invest as much as $100 billion in OpenAI to support the buildout of AI data center capacity.

“NVIDIA and OpenAI have pushed each other for a decade, from the first DGX supercomputer to the breakthrough of ChatGPT,” Nvidia CEO Jensen Huang said. “This investment and infrastructure partnership mark the next leap forward—deploying 10 gigawatts to power the next era of intelligence.”

The two companies agreed to a letter of intent on the partnership, which will deploy at least 10 gigawatts of Nvidia AI systems to train and run OpenAI’s next-generation AI models. The first phase is projected to come online during the second half of 2026 using Nvidia’s upcoming Vera Rubin platform. Nvidia’s investment in OpenAI will be done as each gigawatt is deployed.

OpenAI said Nvidia will be the “preferred” compute and networking partner for its AI factory growth plans. The two companies said they would finalize the details of the partnership in the coming weeks.

“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 CEO Sam Altman said.

In an interview on CNBC, Altman said only Nvidia had the capability to enable an AI infrastructure buildout at this type of enormous scale and speed.

Earlier this month, Broadcom shares surged after the company announced it had won a $10 billion order for AI chips from a new customer. The Wall Street Journal reported a day later that the customer was OpenAI.

After the news some analysts have wondered if Broadcom would attain a much larger share of OpenAI’s AI chip orders in the future. But the new partnership with Nvidia may lower the chances of that scenario.

Nvidia shares rose 3.9% to $183.61 on Monday following the partnership news, while Broadcom stock fell 1.6% to $338.79.

Write to Tae Kim at tae.kim@barrons.com