The artificial intelligence industry has seen its share of deals that generate enormous publicity and then quietly evaporate. Nvidia’s new $30 billion equity investment in OpenAI is being structured specifically to avoid that fate. Free of chip purchase conditions, devoid of circular logic, and built around straightforward equity ownership, it is a deal that can actually be evaluated on its merits.
OpenAI’s funding round will reportedly raise approximately $100 billion in total, at a $730 billion valuation. Amazon, SoftBank, and Microsoft are expected to join Nvidia in the round — making it one of the most closely watched capital events in the technology world. The $730 billion figure is extraordinary, placing OpenAI just behind SpaceX among the most valuable private companies on earth.
The deal that preceded this one serves as an important cautionary tale. Nvidia’s $100 billion announcement last September was built on chip purchase commitments that made the investment circular. The deal drove Nvidia’s market cap above $5 trillion, generated extraordinary media coverage, and then dissolved when it was confirmed to be non-binding. OpenAI, it emerged, had already been exploring chip alternatives even as the deal was being publicized.
Those alternatives — AMD and Broadcom — have since been formalized. OpenAI’s chip strategy has diversified, and the exclusive Nvidia dependency that gave the original deal its surface logic no longer exists. Nvidia’s response has been to transform its investment approach: out with the chip-linked arrangement, in with clean equity ownership.
The challenges that OpenAI must overcome to justify its $730 billion valuation are well-documented. ChatGPT’s market position has weakened. Anthropic is competing effectively for enterprise clients. Cash burn is high. Revenue models are uncertain. Key investors are hedging. These are legitimate concerns — but Nvidia has concluded that a $30 billion equity stake in OpenAI’s future is a bet worth making. The deal is built to last, if OpenAI can deliver.