Nvidia Trims OpenAI Investment Amid Major New Funding Round
In a significant shift, Nvidia has scaled back its previously announced $100 billion commitment to OpenAI, now pledging $30 billion as part of a new $110 billion funding round. This development comes less than six months after the initial high-profile announcement, marking a notable recalibration in the AI giant's financial backing.
OpenAI Announces $110 Billion Funding at $730 Billion Valuation
OpenAI has officially unveiled a substantial new investment round totaling $110 billion, valuing the company at $840 billion, or $730 billion on a pre-money basis. The funding includes $30 billion from SoftBank, $50 billion from Amazon, and $30 billion from Nvidia. This round represents a strategic consolidation of resources, with OpenAI emphasizing enhanced partnerships and computing capabilities.
"Today we're announcing $110B in new investment at a $730B pre-money valuation. This includes $30B from SoftBank, $30B from NVIDIA, and $50B from Amazon," OpenAI stated. The company also highlighted a strategic partnership with Amazon and secured next-generation inference compute with Nvidia, with additional financial investors expected to join as the round progresses.
Background: The Original $100 Billion Plan
Last year, Nvidia and OpenAI announced an ambitious plan where Nvidia would invest up to $100 billion in OpenAI and construct 10 gigawatts of computing infrastructure. This was widely viewed as a major vote of confidence from one of the leading companies in AI hardware, signaling deep commitment to OpenAI's growth and technological advancements.
What Actually Happened: Non-Binding Agreement Revealed
According to a report in the Wall Street Journal earlier this year, Nvidia CEO Jensen Huang informed industry associates that the original $100 billion agreement was non-binding and never finalized. This revelation clarifies that the headline-making figure was not a firm commitment. Reports also indicated that Huang expressed reservations about OpenAI, criticizing what he perceived as a lack of discipline in the company's business approach.
The New Deal: Smaller but Still Significant
While Nvidia's investment is now $30 billion instead of $100 billion, it remains a substantial contribution. The infrastructure commitment has also been reconfigured. Under the new arrangement, OpenAI will gain access to 3 gigawatts of dedicated inference capacity and 2 gigawatts of training capacity on Nvidia's next-generation Vera Rubin systems. This builds upon existing Hopper and Blackwell systems already operational across Microsoft, Oracle Cloud Infrastructure, and CoreWeave.
"We are also expanding our long-standing collaboration with NVIDIA, including the use of 3GW of dedicated inference capacity and 2 GW of training on Vera Rubin systems," OpenAI explained. This capital and infrastructure expansion is designed to strengthen the company's ability to train and deploy frontier models on a global scale.
Amazon's Major Role in the Funding Round
Amazon has emerged as a key player in this funding round, committing $50 billion in total. This includes an initial $15 billion, with an additional $35 billion to follow once certain conditions are met. Alongside the investment, OpenAI and Amazon have established a separate commercial deal where OpenAI will utilize 2 gigawatts of computing capacity powered by Amazon's in-house Trainium chips, further diversifying its technological partnerships.
This revised funding structure underscores the dynamic nature of high-stakes investments in the AI sector, with strategic adjustments reflecting evolving business priorities and market conditions.
