- Nvidia's $100B OpenAI Deal Barely Moves From Letter of Intent
- “There are no guarantees that we will reach final agreements.”
- Long lead times and regular renewal cycles pose a risk to long-term deals.
Cooperation between Nvidia and OpenAI have received their share of publicity, but the deal is not yet finalized and remains little more than a letter of intent to this day.
Nvidia CFO Colette Kress confirmed at the UBS Global Technology and AI Conference that a final agreement has not yet been reached.
The original plan called for deploying millions of Nvidia GPUs over several years, resulting in 10 GW of data center capacity.
Nvidia's OpenAI deal is still in the works
“We still haven't reached a final agreement, but we are working with them,” Kress noted (via Luck).
“There can be no assurance that we will enter into definitive agreements regarding OpenAI capabilities or other potential investments, or that any investments will be completed on the expected terms, if at all,” Nvidia wrote in its release. filing 10-Q.
The company also highlighted risk factors associated with long-term partnerships, such as long-term, non-cancellable orders that could lead to excess inventory if customers dwindle. Constant annual architecture releases can also make demand forecasting difficult.
Kress said Blackwell and Vera Rubin's roughly $500 billion system requirements for 2025-26 do not include any OpenAI requirements related to the potential deal.
While Nvidia shares rose about 2.6% following the CFO's remarks, investor concerns about an “AI bubble” remain – cyclical deals in which Nvidia invests in startups that then go on to buy Nvidia chips make the whole situation dependent on each other.
This has prompted major institutions such as Bank of England to warn of 'sharp market corrections' when bubble bursts – description of potential risks for technology companies bound by long-term agreements.
Speaking about competition, Kress also stressed that Nvidia is “absolutely not” worried about companies like Google creation of own transport hubs. “Everyone is using our platform,” she noted, suggesting it will take a long time for the industry to move away from Nvidia hardware.
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