NVIDIA's plan to invest $100B in OpenAI stalls
What's the story
NVIDIA's plan to invest up to $100 billion in OpenAI has hit a snag, according to The Wall Street Journal. The deal, which was announced in September, aimed at helping OpenAI train and run its latest artificial intelligence (AI) models. However, some within the chip giant have expressed doubts about the transaction, leading to a rethink of their partnership.
Clarification
Deal was non-binding, not finalized: Jensen Huang
NVIDIA CEO Jensen Huang has reportedly clarified to industry associates that the original $100 billion deal was non-binding and not finalized. He has also been critical of what he perceives as a lack of discipline in OpenAI's business approach. Further, he is worried about the competition from Google and Anthropic, The Wall Street Journal reported.
Partnership prospects
OpenAI's funding round attracting interest from tech giants, investors
The companies are now rethinking their partnership, with one possibility being an equity investment of tens of billions of dollars as part of OpenAI's current funding round. This comes as OpenAI is looking to raise up to $100 billion in funding, valuing it at about $830 billion. Meanwhile, tech giants and investors such as Amazon and SoftBank Group Corp are racing to partner with the AI start-up.
Investment strategy
NVIDIA's history of AI investments
NVIDIA has a history of making high-profile investments in AI companies. Just this week, it announced plans to invest an additional $2 billion in CoreWeave Inc., a cloud computing provider and customer. These deals have raised questions about the sustainability of the AI boom, but Huang has dismissed such concerns, saying these investments are just a small part of what companies will need to raise.