Nvidia (NVDA) shares jumped nearly 4% on Monday after the semiconductor giant announced a landmark partnership with OpenAI that will see the company invest up to $100 billion to power the next wave of artificial intelligence models.
According to Nvidia’s announcement, the deal will enable OpenAI to access “at least 10 gigawatts” of compute capacity from Nvidia’s cutting-edge AI systems to train and run the ChatGPT-maker’s upcoming models. The first portion of that capacity — running on Nvidia’s forthcoming Vera Rubin platform — is slated to go live in the second half of 2026.
On Monday afternoon, Nvidia shares traded at $182.94, up $6.34, or 3.59%, as of 2:25 PM EDT, putting the company within striking distance of its August record high above $183.
Nvidia’s GPUs — or “AI chips” — already form the backbone of most major AI applications, powering massive data centers around the world. The new partnership extends a relationship between the two companies that stretches back to OpenAI’s earliest days.
“NVIDIA and OpenAI have pushed each other for a decade, from the first DGX supercomputer to the breakthrough of ChatGPT,” Nvidia CEO Jensen Huang said in a statement.
Industry analysts have described the OpenAI-Nvidia deal as one of the most ambitious infrastructure undertakings in tech history. For comparison, Meta’s vast new AI data center under construction in Louisiana — spanning 4 million square feet — is expected to deliver only about two gigawatts of compute capacity, roughly one-fifth of what Nvidia and OpenAI are now promising. Deploying 10 gigawatts would equate to roughly 4 million to 5 million Nvidia GPUs, CFRA analyst Angelo Zino estimated.
Monday’s announcement comes as Nvidia accelerates its AI investments and partnerships on several fronts. Just last week, the company took a $5 billion stake in fellow chipmaker Intel (INTC) as part of a broader effort to integrate Intel’s CPUs into Nvidia’s AI platforms. Nvidia also recently unveiled plans to deploy tens of thousands of AI chips in the United Kingdom and signed a $6.3 billion agreement with CoreWeave (CRWV) guaranteeing that Nvidia will purchase unused compute capacity from the AI-focused data center operator.
“While some still raise concerns about AI being a potential bubble, Nvidia’s investment signals that the need for AI infrastructure is real and still expanding,” said Greg Halter, Director of Research at Carnegie Investment Counsel.
For OpenAI, the deal represents another step in its drive to secure unprecedented levels of computing power, even as some investors question the sustainability of the company’s spending. Earlier this year, OpenAI signed a $300 billion agreement to buy computing resources from Oracle (ORCL) over the next five years, according to The Wall Street Journal.
Some analysts expressed concern Monday that Nvidia has effectively become OpenAI’s “investor of last resort.” DA Davidson’s Gil Luria wrote in a note following the announcement that “OpenAI has been making commitments well beyond its means,” citing not only the Oracle agreement but also the company’s $100 billion plan to rent backup cloud servers over five years and its $25 billion commitment to CoreWeave.
“[W]e would like to see more traditional investors step up to fund the great data center buildout,” Luria added. In a separate email to Yahoo Finance, he cautioned that “it is not healthy that the only investor willing to fund OpenAI’s ambitions at this scale is their chip provider who will get most of that investment back as chip sales.”
Despite the cautionary notes, investors appeared encouraged by the scale of Nvidia’s move. Monday’s rally pushed the company’s stock toward its all-time highs, underscoring Nvidia’s position as the world’s most valuable company with a market capitalization exceeding $4 trillion.
The OpenAI partnership, if executed successfully, would cement Nvidia’s role at the center of the AI revolution — and potentially ensure that the company reaps the rewards of its own unprecedented investment.
Pump Radar
Stock Alerts