Nvidia Stock Surges Following $100B OpenAI Partnership

When the CEO of the most valuable company in the world refers to a project as “the largest AI infrastructure project in history,” one can be sure it’s not all a deception, it’s a turbo liftoff. And with a record stock price already under their belt, the market appears more than happy to purchase tickets for this production.

Nvidia shares jumped close to 4% on Monday after unveiling an extraordinary $100 billion investment in OpenAI. The chip behemoth will supply at least 10 gigawatts of computing power to the ChatGPT creator, which will allow OpenAI to train and use its next-generation AI models. The initial deployment of this compute power will arrive in the second half of 2026, fueled by Nvidia’s much anticipated Vera Rubin platform. 

As per CEO Jensen Huang, this partnership is “the biggest AI infrastructure project in history”. It is a milestone in the tech universe. With Nvidia’s GPUs being already the foundation of AI data centers across the globe, the acquisition solidifies the company’s leadership in AI infrastructure.

Potential for Growth

Nvidia’s shares closed at $183.61 on Monday, hitting an all-time high, before easing slightly on early Tuesday trading. The firm’s market cap is now over $4 trillion, cementing its position as the world’s most valuable company. Wall Street projects enormous upside. Bank of America analyst Vivek Arya puts the OpenAI deal at $500 billion in potential revenue for Nvidia over the years. The partnership indicates not only expansion, but a long-term demand pipeline for Nvidia’s GPUs, which are the chips driving the AI revolution.

To put this in perspective, Meta’s planned Louisiana AI data center initiative only offers up 2 gigawatts of compute capacity. Nvidia and OpenAI are looking to achieve five times the capacity, or equivalent to up to 5 million of Nvidia’s GPUs, as per the CFRA analyst Angelo Zino.

A Web of Strategic Alliances

The OpenAI investment is just a segment of a broad expansion effort by Nvidia in the AI space. Last week, it invested $5 billion in Intel to bring its CPUs into Nvidia’s AI frameworks. It also agreed a $6.3 billion deal with CoreWeave, which is gaining access to deterred compute capacity from the AI data center provider. Outside the U.S borders, Nvidia announced expansion plans for deploying tens of thousands of AI chips around the UK, which further solidified its international AI presence. Huang said,

“NVIDIA and OpenAI have pushed each other for a decade, from the first DGX supercomputer to the breakthrough of ChatGPT”.

Concerns About Risk and Scale

As the agreement projects enormous ambition, not everybody believes it is a one-way bet. Analysts warn that Nvidia is venturing into the position of “investor of last resort” for OpenAI, which has been making enormous investments to obtain AI infrastructure. DA Davidson’s Gil Luria pointed to other heavy financial commitments made by OpenAI, such as, a $300 billion Oracle cloud agreement over five years, a $100 billion backup cloud server plan, and a $25 billion contract with CoreWeave.

Luria said,

“We would like to see more traditional investors step up to fund the great data center buildout. It is not healthy that the only investor willing to fund OpenAI’s ambitions at this scale is their chip provider who will get most of that investment back as chip sales.” 

To put it another way, the short-term gains might go to Nvidia, but more critical warning signs could come from the financial successes of OpenAI should it not be able to attain long-term profitability.

Bottom Line                                                                        

Nvidia’s $100 billion OpenAI wager is not simply another agreement, it’s a watershed moment in the AI infrastructure competition. With 10 gigawatts of compute capacity on the line, Nvidia is not only solidifying its status as the foundation of AI but also raising the bar for how aggressively companies will have to spend to remain competitive.

For Nvidia, the reward appears massive, with possible revenue streams that would surpass even today’s record-setting figures. For OpenAI, the acquisition gives it time and computational power but also raises questions on whether the company is growing too quickly without enough diversified funding. Eventually, it will either go down in history as the greatest breakthrough in technology or as the moment when the financial bubble inflated too far in the world of AI infrastructure.

Also, the $100 billion OpenAI acquisition can be a billion-dollar risk that will define this AI age. It will probably make Nvidia the necessary foundation of artificial intelligence. Investors will label it as bold, critics will label it as reckless, but one thing is sure that Jensen Huang has reminded the world all over again that Nvidia plays offense, not defense.