In a significant move that cements the “Muskonomy” as a global tech powerhouse, Nvidia is reportedly nearing a $20 billion investment in OpenAI as part of a massive funding round that could value the startup at over $800 billion.
While the $20 billion figure is historic—marking Nvidia’s largest single investment—it represents a recalibration from a previously discussed $100 billion letter of intent that has since been described by CEO Jensen Huang as “non-binding” and “progressive.”
1. The $20 Billion Shift: “One Step at a Time”
On February 3, 2026, reports from Reuters and Bloomberg confirmed that Nvidia is close to finalizing a $20 billion stake. This follows a period of intense speculation regarding a massive $100 billion partnership announced in September 2025.
- Strategic Recalibration: Jensen Huang clarified in Taipei this week that the $100 billion figure was an “invitation” to invest over time, not a one-time commitment. Nvidia will now evaluate funding “one round at a time.”
- OpenAI’s $100B Round: OpenAI is currently seeking to raise up to $100 billion in total capital from a consortium including Amazon ($50B), SoftBank ($30B), and Nvidia ($20B).
- Valuation: The deal is expected to value OpenAI at approximately $830 billion, making it one of the most valuable private companies in history.
2. The “Inference War” & Performance Friction
Despite the high-profile investment, the relationship between the two giants has faced technical hurdles, particularly regarding AI inference (running models for users).
| Issue | Context |
| Speed Dissatisfaction | OpenAI reportedly found Nvidia’s latest chips “suboptimal” for high-speed tasks like Codex (AI coding) due to external memory bottlenecks. |
| Search for Alternatives | OpenAI is seeking hardware to cover 10% of its inference needs from rivals like AMD and startups like Cerebras (which signed a $10B deal with OpenAI last month). |
| Nvidia’s Counter-Move | To block rivals, Nvidia entered a $20 billion licensing deal with Groq in late 2025, absorbing their low-latency “LPU” technology to improve its own inference performance. |
3. The “AI Factory” Roadmap (2026-2027)
The investment is not just about cash; it is about building the world’s most advanced AI infrastructure.
- 10 Gigawatt Vision: The partnership aims to deploy 10 gigawatts of compute capacity—equivalent to the peak power demand of New York City.
- Vera Rubin Platform: The first gigawatt of these systems is scheduled to go online in the second half of 2026, powered by Nvidia’s next-generation Vera Rubin chips.
- Co-Optimization: OpenAI and Nvidia are co-designing hardware-software stacks to ensure GPT-5 and beyond run with maximum efficiency on Nvidia silicon.
4. Market Reaction & “Circular” Concerns
The news has sparked a mix of excitement and scrutiny on Wall Street:
- Volatility: Nvidia shares dropped roughly 3.6% following the reports, as some investors expressed concerns over “circular AI deals”—where Nvidia invests in the very customers that buy its chips.
- The “Izanagi” Rivalry: SoftBank’s $30 billion participation in this round is notable, as Masayoshi Son is simultaneously building a $100 billion AI chip rival (Project Izanagi).
Conclusion: A Necessary Alliance
The $20 billion investment is a defensive masterpiece for Nvidia and a financial lifeline for OpenAI. While OpenAI is flirting with rival chips to solve its “inference bottleneck,” it remains tethered to Nvidia for the massive compute power required to reach Artificial General Intelligence (AGI). For Jensen Huang, the investment ensures that even as OpenAI looks elsewhere, Nvidia remains the “preferred strategic partner” at the heart of the AI revolution.
