OpenAI’s valuation is projected to reach as much as $500 billion following Nvidia’s decision to invest up to $100 billion in the artificial intelligence startup.
The investment, announced on Monday, is one of the largest single commitments in the technology sector and highlights the accelerating demand for computing infrastructure to power AI applications.
According to Bloomberg, OpenAI is in early talks for a stock sale that would value the company at half a trillion dollars, making it the most valuable startup globally.
The Nvidia deal adds significant weight to that process, with the Santa Clara–based chipmaker agreeing to provide staged funding in exchange for equity.
The first tranche of $10 billion will be released when the agreement is finalized, while subsequent disbursements will be tied to the deployment of one gigawatt of computing power at each stage.
The strategic partnership is designed to expand OpenAI’s capacity with new data centers capable of generating at least 10 gigawatts of power. These facilities will be equipped with Nvidia’s advanced AI chips, further solidifying the company’s position as the leading supplier of accelerators that train and deploy large language models, including ChatGPT.
Nvidia Chief Executive Officer Jensen Huang described the arrangement as “the next leap forward,” noting that 10 gigawatts is equivalent to the peak electricity demand of New York City.
“This investment and infrastructure partnership mark the next leap forward — deploying 10 gigawatts to power the next era of intelligence,” Huang stated.
The announcement immediately boosted investor confidence, with Nvidia shares rising 3.9% in New York trading. The stock has advanced 37% year-to-date, reinforcing Nvidia’s standing as the world’s most valuable publicly traded company.
OpenAI Chief Executive Officer Sam Altman emphasized that computing power will be the foundation of future economic growth.
“Everything starts with compute,” Altman said. “Compute infrastructure will be the basis for the economy of the future.”
He also confirmed that the company is preparing to roll out new compute-intensive product offerings in the coming weeks.
Industry analysts note that the revenue impact from the Nvidia-OpenAI partnership could exceed the size of the investment. Bernstein Research estimates that a single gigawatt of data center capacity could involve tens of billions of dollars’ worth of Nvidia hardware.
The move comes as OpenAI competes with Microsoft, Meta, and Oracle in the race to secure massive computing power for AI workloads.
Earlier this year, OpenAI, Oracle, and SoftBank announced plans to commit $500 billion to data center development, while Microsoft disclosed $30 billion in AI-related infrastructure spending for the September quarter alone.
The Nvidia partnership strengthens OpenAI’s market position as it scales its products to meet the demands of roughly 700 million weekly users of ChatGPT.
It also reinforces Nvidia’s strategy of using its growing financial strength to ensure its chips remain at the core of the global AI revolution.