Nvidia will invest $100 billion in OpenAI, to provide it data center chips, said the two companies on Monday. This would bring about a union among two of the highest-profile participants in the global AI race.
The move elucidates the interest increasingly overlapping into the various tech giants that develop advanced AI systems. The agreement grants a financial interest to chipmaker Nvidia in OpenAI, already an important customer for it.
Two main things arise from this partnership: On the one hand, it potentially disturbs the competition between two big players. On the other hand, the investment seeks to provide OpenAI with the necessary cash and chips and thereby advanced chip technology to keep up with the ever-folding landscape. The deal will contain two sets of transactions that are closely intertwined, according to someone close to OpenAI. It says that after the deal is finalized, Nvidia shall invest in OpenAI for non-voting shares, and then OpenAI shall buy chips from Nvidia with cash.
“Boom. Everything starts with compute,” said OpenAI CEO Sam Altman. “Compute infrastructure will be the basis … for the economy of the future, and they’re going to utilize what they’re building with Nvidia to create this new AI stuff at scale and then empower people and businesses with it.”
The companies entered into an agreement with a letter in which they committed to installing at least 10 gigawatts of Nvidia systems for OpenAI and stated that partnership details would be finalized in the coming weeks. The chips require energy equivalent to what more than 8 million U.S. households would consume.
Nvidia shares gained up to 4.4%, hitting a record intraday high after the announcement, while Oracle, a data center builder, gained 6%. Oracle, in partnership with OpenAI, SoftBank, and Microsoft, are conspiring on a $500 billion build-out named Stargate: a proposal to erect colossal AI data centers worldwide.
Under the new deal, once the two sides reach a definitive agreement for OpenAI to purchase Nvidia systems, Nvidia is said to invest an initial $10 billion, the person familiar with the matter said. OpenAI was last valued at about $500 billion.
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