Nvidia Abandons Milestone-Linked Deal, Bets $30 Billion Directly on OpenAI Equity
Nvidia Closes In on $30 Billion Direct Equity Stake in OpenAI, Replacing Stalled $100 Billion Infrastructure Pact
Deal Overview
Nvidia (NASDAQ: NVDA) is on the verge of finalizing a $30 billion direct equity investment in OpenAI, according to multiple sources familiar with the matter confirmed by Reuters and CNBC (as of Thursday, February 19, 2026, Eastern Time). The deal is part of a massive fundraising round in which OpenAI is seeking to raise more than $100 billion in total — one of the largest private capital raises in technology history.
At a pre-money valuation of approximately $730 billion, the round would push OpenAI's post-money valuation to around $830 billion, cementing its status as one of the most valuable private companies in the world.
A Strategic Pivot: From Infrastructure Deal to Pure Equity
This new $30 billion commitment marks a significant departure from a previous arrangement announced in September 2025, when Nvidia and OpenAI unveiled a letter of intent for a $100 billion infrastructure partnership. Under that earlier framework, Nvidia would invest progressively as OpenAI deployed up to 10 gigawatts of AI computing capacity using Nvidia's Vera Rubin platform — with an initial $10 billion tranche tied to the first gigawatt coming online.
However, that agreement never progressed beyond a non-binding letter of intent. Negotiations took far longer than anticipated, and by January 2026, reports indicated the $100 billion plan had effectively stalled.
The revised structure cuts through that complexity. The new $30 billion investment is a straightforward equity stake with no deployment milestones attached, offering both companies greater flexibility as the competitive AI landscape rapidly shifts.
OpenAI's Capital Plans and Nvidia's Hardware Dominance
Despite the strategic restructuring, the financial relationship between the two companies remains deeply symbiotic. OpenAI plans to reinvest a substantial portion of the new capital into purchasing Nvidia chips — the GPUs that power the training and deployment of its flagship models, including ChatGPT.
OpenAI CEO Sam Altman, speaking from the AI Impact Summit in New Delhi (Eastern Time: Thursday evening, February 19), called earlier rumors of a rift between the two companies "insanity." He reaffirmed that OpenAI expects to remain a "gigantic customer" of Nvidia for the foreseeable future, and that the company will continue to utilize a rich hardware portfolio including Nvidia's next-generation Vera Rubin platform.
OpenAI's revenue reportedly surpassed $20 billion in 2025, providing a strong commercial foundation to support its enormous infrastructure spending.
Who Else Is in the Round?
The funding round is structured to close in two phases. The first phase draws from strategic investors including:
- Amazon (AMZN)
- Microsoft (MSFT)
- Nvidia (NVDA)
- SoftBank Group (though SoftBank stated on an earnings call last week that "nothing has been decided")
A broader pool of financial investors is expected to follow in a second tranche. Sources indicate the agreement could be concluded as early as this weekend (around February 22, 2026, Eastern Time).
Market Context and Industry Implications
The deal arrives during a period of turbulence for the broader technology sector. U.S. tech stocks have declined roughly 17% since the start of 2026, driven in part by concerns over AI valuations, circular financial structures among AI ecosystem players, and sector concentration risk.
Nvidia's move to a direct equity stake — rather than a supply-linked investment — is widely seen as an effort to reduce structural complexity and secure a clean ownership position in the AI leader. Industry analysts note that chipmakers, cloud providers, and AI model developers have become increasingly intertwined, making it difficult to distinguish suppliers from customers from investors.
Nvidia CEO Jensen Huang stated during a CNBC interview earlier this month that there was "no question" Nvidia would invest in OpenAI's next funding round, signaling confidence in the deal even as negotiations continued.
If finalized, Nvidia's $30 billion stake would represent one of the most consequential investments in the history of artificial intelligence, reinforcing the tight bond between hardware dominance and AI innovation — and further reshaping the balance of power in the global technology sector.