More questions than answers in Nvidia’s $100 billion OpenAI deal

Nvidia’s (NVDA.O) decision to invest up to $100 billion into OpenAI, while also agreeing to supply millions of its industry-leading AI chips to the creator of ChatGPT, marks a move with few precedents in the tech sector.

The deal represents an unusual scenario in which Nvidia will acquire a financial stake in one of its largest customers but without any voting rights, according to a source close to OpenAI. For OpenAI, the agreement provides much-needed funding to support its ambitious plan to build vast supercomputers powering the next generations of artificial intelligence — though it still leaves questions about how the company will raise the rest of the required capital.

Nvidia’s initial commitment of $10 billion will be directed toward developing one gigawatt of data center capacity using its next-generation Vera Rubin chips, with construction scheduled to begin in the second half of 2026.

The announcement has sparked debate across the tech and investment worlds. Here are five key questions surrounding the deal:

Where Will the Rest of the Money Come From?

During an August earnings call, Nvidia CEO Jensen Huang estimated that building out one gigawatt of AI data center capacity costs around $50 billion, with approximately $35 billion of that total going toward Nvidia’s hardware.

Nvidia has pledged to cover about $10 billion per gigawatt, leaving OpenAI responsible for raising the remaining $40 billion per gigawatt. The company has not clarified whether it agrees with Huang’s cost estimates, nor has it disclosed how it intends to secure the additional funding.

OpenAI declined to comment on its funding strategy, while Nvidia reiterated only what it has already made public.

What Does This Mean for OpenAI’s Shift Toward a For-Profit Model?

OpenAI was originally structured as a non-profit research organization. However, in recent years, it has been actively pursuing a more conventional corporate model to attract investment and potentially go public.

The company has already held extensive talks with Microsoft (MSFT.O), its early backer and major shareholder, about converting into a public benefit corporation overseen by the existing non-profit. A tentative agreement has been reached, but approval is still pending from regulators in Delaware and California.

For Nvidia, the timing is important: its $10 billion initial investment will not move forward until both companies finalize a definitive agreement. It also remains unclear whether Nvidia’s commitment depends on OpenAI completing its corporate restructuring.

How Will This Affect OpenAI’s Valuation?

OpenAI currently carries an estimated valuation of $500 billion. Nvidia’s first $10 billion investment — earmarked for one gigawatt of data center build-out — is expected to take place at this valuation, according to a source familiar with the negotiations.

What remains uncertain is whether future Nvidia contributions, potentially totaling up to $100 billion, will occur at today’s valuation or be adjusted to reflect OpenAI’s worth at the time of each new investment. No timeline has been provided for when the full 10 gigawatts of capacity might be operational.

What Are the Competitive Implications?

Nvidia’s chips remain the most sought-after hardware in the AI industry, and demand continues to outpace supply years into the current AI boom. By dedicating a large share of its processors to OpenAI — and simultaneously becoming an investor — Nvidia could end up reshaping competitive dynamics.

The deal raises the question of how much access rivals like Anthropic or even Microsoft, which sells AI tools in competition with OpenAI, will retain to Nvidia’s hardware. Meanwhile, competitors such as AMD (AMD.O), which is trying to expand its footprint in the AI accelerator market, may face additional challenges in convincing companies like OpenAI to diversify their hardware suppliers.

What Does It Mean for Oracle?

Earlier this month, Oracle (ORCL.N) announced it had signed hundreds of billions of dollars in contracts to deliver cloud services to OpenAI and other major customers. The news boosted its stock and propelled co-founder Larry Ellison higher on the global wealth rankings.

However, analysts and credit agencies like Moody’s have questioned whether OpenAI actually has the financial capacity to pay for such massive contracts. Nvidia’s injection of capital may help ease those concerns, potentially putting Oracle’s forecast on firmer ground by securing OpenAI’s ability to meet future obligations.

The Bottom Line

Nvidia’s unprecedented plan to invest up to $100 billion in OpenAI highlights both the promise and uncertainty of the AI revolution. While the deal could accelerate OpenAI’s ambitions and cement Nvidia’s dominance in the AI chip market, it leaves fundamental questions about funding, governance, and competition unresolved.