Nvidia's Largest Investment Ever: $100 Billion to Help OpenAI Build a 10-Gigawatt AI Data Center

Abstract

On September 22 (U.S. local time), NVIDIA and OpenAI announced a landmark strategic partnership agreement. NVIDIA will invest up to $100 billion in OpenAI, and the two companies will jointly build at least 10 gigawatts (GW) of AI data centers. This marks NVIDIA's largest investment commitment to date.

Unprecedented Scale of Collaboration

Through this strategic partnership, OpenAI will build and deploy at least 10 GW of AI data centers, equipped with millions of NVIDIA GPUs, to construct next-generation AI infrastructure. Jensen Huang revealed in an interview that 10 GW is equivalent to 4 million to 5 million Graphics Processing Units (GPUs), which is roughly NVIDIA's total shipments for this year, and double that of last year.

Investment Plan Details

According to sources familiar with the matter, NVIDIA's initial $10 billion investment will be made upon the completion of the first gigawatt data center. NVIDIA will invest progressively as each gigawatt data center comes online, with the first phase expected to be operational in the second half of 2026, based on NVIDIA's Vera Rubin platform.

Positive Market Reaction

At the close of U.S. stock trading, NVIDIA's stock price closed up nearly 4%, reaching a new historical high, with its total market capitalization rising to $4.46 trillion. The news of this collaboration also boosted the overall U.S. tech sector.

Executive Statements

Jensen Huang, Founder and CEO of NVIDIA, stated: "For a decade, from the first DGX supercomputers to breakthroughs like ChatGPT, NVIDIA and OpenAI have continuously pushed each other forward and grown together. This investment and infrastructure partnership marks a new leap forward for both parties – we will deploy 10 gigawatts of computing power to fuel a new era of intelligence."

OpenAI CEO Sam Altman said in an interview, "Everything starts with computing power. Computing power infrastructure will be the foundation of the future economy." He emphasized that the jointly built technological ecosystem with NVIDIA will be utilized to achieve new breakthroughs in artificial intelligence and to empower individuals and businesses with these technologies on a large scale.

Project Cost Analysis

According to Jensen Huang's previous statements during an earnings call, the cost to build 1 GW of data center capacity ranges between $50 billion and $60 billion, with approximately $35 billion allocated for procuring NVIDIA chips and systems. Based on this calculation, the total investment for the 10 GW project will reach hundreds of billions of dollars.

Strategic Significance

This collaboration marks a new phase in AI infrastructure development. The power consumption, equivalent to that of 8 million U.S. households, underscores the immense scale of the project. This partnership will also complement existing collaborations between both parties and Microsoft, Oracle, SoftBank, and the "Stargate" project.

Industry Impact

Prior to this investment, investors had valued OpenAI at $500 billion in a secondary market transaction. This collaboration will further solidify NVIDIA's leadership in the AI chip sector while providing OpenAI with robust computing power support to meet its growing user demand and technological innovation.

NVIDIA has been actively making investments recently, having previously announced a $5 billion investment to acquire a stake in Intel and approximately $700 million in UK data center startup Nscale, demonstrating its comprehensive strategic layout in the AI ecosystem.