Nvidia’s proposal to invest as much as 100 billion dollars in OpenAI has been put on hold after concerns were raised internally at the chipmaker about the scale and structure of the deal.
The plan, announced in September last year, involved a non-binding memorandum of understanding under which Nvidia would build at least 10 gigawatts of computing capacity for OpenAI and potentially invest up to 100 billion dollars to help fund the infrastructure, with OpenAI leasing the chips from Nvidia, The Wall Street Journal reported.
While OpenAI has been a pioneer in Artificial Intelligence with its popular chatbot ChatGPT, Nvidia dominates the market for AI processors that help develop such software.
The WSJ report said Nvidia CEO Jensen Huang has privately played down the likelihood of the original agreement being finalised, emphasising to industry contacts that the deal was never binding and remains unfinished. Despite this, both companies are expected to continue working closely on AI development.
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Separately, Reuters reported that Huang has publicly denied being unhappy with OpenAI, calling claims to that effect “nonsense.” Speaking to reporters in Taipei, Huang said Nvidia still plans to make a “huge” investment in the ChatGPT maker and described OpenAI as one of the most consequential companies of the current era.
While reaffirming Nvidia’s interest, Huang clarified that the eventual investment would not be anywhere near 100 billion dollars, adding that the size of the funding round and the amount to be raised would ultimately be decided by OpenAI CEO Sam Altman.
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The WSJ also reported that Huang has privately expressed concerns about what he views as a lack of financial discipline at OpenAI and increasing competition from rivals such as Google and Anthropic, factors that may have contributed to Nvidia’s hesitation.
Meanwhile, OpenAI is in talks to raise fresh capital from multiple investors, including Amazon, which is said to be considering an investment of up to 50 billion dollars. OpenAI is reportedly seeking to raise as much as 100 billion dollars in total funding, which could value the company at around 830 billion dollars.
(With inputs from Reuters)
