Nvidia's billion-dollar gamble on OpenAI seems to have fizzled out, leaving investors and tech enthusiasts wondering what went wrong. The tech giant's proposed $100 billion investment in the AI upstart was touted as a massive deal just six months ago, with Nvidia CEO Jensen Huang saying it would be "a huge investment" and "our biggest investment ever." However, in recent weeks, Huang has walked back those claims, telling reporters that the $100 billion figure was never a concrete commitment and that Nvidia would invest "one step at a time."
The collapse of the deal comes as OpenAI CEO Sam Altman attempts to downplay the issue, saying that Nvidia is still a major customer for the company. However, insiders are painting a different picture, with some reportedly expressing doubts about the transaction due to concerns over OpenAI's business approach and competition from Google and Anthropic.
The $100 billion investment was always a letter of intent, not a binding contract, but the lack of clarity on the deal has raised eyebrows among investors. "One of the things I did notice about Jensen Huang is that there wasn’t a strong 'It will be $100 billion,'" said Sarah Kunst, managing director at Cleo Capital. "It was, 'It will be big. It will be our biggest investment ever.'"
The circular nature of such investments has long been a subject of criticism from tech critic Ed Zitron, who argues that Nvidia's deals with numerous companies create a web of dependencies that ultimately harm the ecosystem as a whole.
As OpenAI continues to explore alternative suppliers for its GPU needs, including startups Cerebras and Groq, it appears that the company is hedging its bets. Despite striking a $20 billion licensing deal with Groq last year, Nvidia has since hired Groq's founder and CEO Jonathan Ross, while OpenAI has also partnered with AMD on a 6-gigawatt GPU deal.
The lack of clarity surrounding Nvidia's investment in OpenAI has left many wondering what the future holds for the tech giant's AI ambitions. One thing is certain, however: the collapse of this massive deal sends a clear signal that the relationship between these two tech giants is far from solidified.
The collapse of the deal comes as OpenAI CEO Sam Altman attempts to downplay the issue, saying that Nvidia is still a major customer for the company. However, insiders are painting a different picture, with some reportedly expressing doubts about the transaction due to concerns over OpenAI's business approach and competition from Google and Anthropic.
The $100 billion investment was always a letter of intent, not a binding contract, but the lack of clarity on the deal has raised eyebrows among investors. "One of the things I did notice about Jensen Huang is that there wasn’t a strong 'It will be $100 billion,'" said Sarah Kunst, managing director at Cleo Capital. "It was, 'It will be big. It will be our biggest investment ever.'"
The circular nature of such investments has long been a subject of criticism from tech critic Ed Zitron, who argues that Nvidia's deals with numerous companies create a web of dependencies that ultimately harm the ecosystem as a whole.
As OpenAI continues to explore alternative suppliers for its GPU needs, including startups Cerebras and Groq, it appears that the company is hedging its bets. Despite striking a $20 billion licensing deal with Groq last year, Nvidia has since hired Groq's founder and CEO Jonathan Ross, while OpenAI has also partnered with AMD on a 6-gigawatt GPU deal.
The lack of clarity surrounding Nvidia's investment in OpenAI has left many wondering what the future holds for the tech giant's AI ambitions. One thing is certain, however: the collapse of this massive deal sends a clear signal that the relationship between these two tech giants is far from solidified.
I'm not surprised at all about this whole situation... Nvidia was always trying to be too big and too clever for its own good 
. They thought they could just swoop in, invest a gazillion dollars, and suddenly have the keys to the AI kingdom 
? Please 
. Sam Altman is just trying to save face at this point, but we all know it's not gonna be easy for him to regain that trust 
. The thing is, investors need clarity, not ambiguity 
... and Nvidia didn't deliver on that front 
. It's like they wanted to make a big splash, but ended up just making a big mess 
!
The lack of clarity on the investment figure was already weird, and now it sounds like Nvidia is just backing out and trying to downplay it 
.
. But maybe it's more about Nvidia just getting cold feet and wanting to distance themselves from the whole thing 
.
they said it was gonna be a huge investment but really it was just a big statement lol 
now its like "oh no we're just gonna invest one step at a time" 
thats not how u sell 100 billion dollars 
and openai is just tryna spin this by sayin nvidia still uses their gpus but insides r tellin a diff story 
anyway, this whole thing just shows how messy the tech world can get when ur dealin w/ billion-dollar investments 
. And now that we know the "$100 billion" figure wasn't even a concrete commitment, I think it's clear that something was fishy 
.
. I mean, if OpenAI is hedging its bets by partnering with other startups like Groq and Cerebras, it's not going to make sense for them to go back to Nvidia when they've got other options 
.
. And, honestly, I'm kinda stoked 
!
. The thing is, Nvidia needs to figure out what it wants to do with its GPU business if it's not going to invest in OpenAI long-term 
. The fact that the deal was always seen as a letter of intent kind of makes sense, but still, it's gotta be disappointing for investors who were all in on this one 
. It’s like they knew it was a long shot and didn’t want to get all in on it 
.
. But seriously what was going through Jensen's head, did he just have a bad day or something? 
. Companies like Cleo Capital are pointing out that there was never any real commitment made by Nvidia and its pretty obvious now. 
.