- Nvidia’s $100 billion deal with OpenAI has barely progressed since a letter of intent
- “There is no guarantee that we will reach definitive agreements”
- Long lead times and regular update cycles are risky for long-term deals
The $100 billion collaboration between Nvidia and OpenAI has received its fair share of publicity, but the deal has yet to close and, to this day, remains little more than a letter of intent.
Nvidia CFO Colette Kress confirmed at the UBS Global Technology and Artificial Intelligence Conference that no definitive deal has yet been completed.
Originally, the plan included deploying millions of Nvidia GPUs over several years, which would result in 10 GW of data center capacity.
Nvidia’s deal with OpenAI is still a work in progress
“We haven’t completed a definitive agreement yet, but we are working with them,” Kress noted (via Fortune).
“There is no assurance that we will enter into definitive agreements with respect to the OpenAI opportunity or other potential investments, or that any investments will be completed on the expected terms, if at all,” Nvidia wrote in a 10-Q filing.
The company also highlighted risk factors associated with long-term partnerships, such as long-running, non-cancelable orders that could lead to excess inventory if customers downsize. Continued annual architecture releases could also make it difficult to forecast demand.
Kress said the roughly $500 billion Blackwell and Vera Rubin system lawsuit for 2025-2026 does not include any OpenAI lawsuits related to the potential deal.
Although Nvidia shares rose about 2.6% following the CFO’s comments, investor concerns about an “AI bubble” persist: Circular deals, in which Nvidia invests in startups that then buy Nvidia chips, make the entire picture dependent on each other.
This has led large institutions such as the Bank of England to warn of “sharp market corrections” when this bubble bursts, outlining the potential risks for technology companies tied to long-term deals.
Speaking of competition, Kress also emphasized that Nvidia is “not at all concerned” about companies like Google making their own TPUs. “Everyone is on our platform,” he noted, suggesting that it would take a long time for the industry to move away from Nvidia hardware.
Follow TechRadar on Google News and add us as a preferred source to receive news, reviews and opinions from our experts in your feeds. Be sure to click the Follow button!
And of course you can also follow TechRadar on TikTok for news, reviews, unboxings in video form and receive regular updates from us on WhatsApp also.
