Constellation Research founder Ray Wang discusses Nvidia’s stock moves ahead of earnings, market uncertainty and the AI race to ‘make money.’
OpenAI said Friday it is raising $110 billion in a blockbuster funding round that could value the maker of ChatGPT at $840 billion, in a deal that reflects the accelerating pace of investment in artificial intelligence.
The funding round – one of the largest private equity funds raised in history – includes a $30 billion investment from SoftBank, $30 billion from Nvidia, and $50 billion from Amazon, and comes ahead of AI’s expected mega-IPO later this year.
More investors are expected to join the round as it progresses, OpenAI said.
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Big Tech companies and big tech investors like SoftBank are rushing to form a partnership with OpenAI – which spends a lot of money in data centers – betting that being close to the company will give them a competitive edge in the AI race.
Open AI CEO Sam Altman speaks during a panel discussion with SoftBank Group CEO Masayoshi Son at an event titled “Transforming Business with AI” in Tokyo, Japan, on Feb. 3. (Tomohiro Ohsumi/Getty Images)
For OpenAI, the new cash will help secure the advanced AI chips and computing power it needs to maintain its position in the AI industry, especially as competition heats up from rivals like Claude chatbot maker Anthropic and Google Gemini.
OpenAI is targeting about $600 billion in total computing usage by 2030, a source told Reuters last week.
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Along with the $50 billion investment, OpenAI and Amazon have also entered into an agreement where OpenAI will use 2 gigawatts of computing capacity powered by Amazon’s in-house Trainium AI chips.
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The companies are also expanding their $38 billion cloud agreement signed last year, and OpenAI says it will spend another $100 billion on Amazon Web Services over the next eight years. Also, OpenAI will work with Amazon to develop customized models for the e-commerce giant’s engineering teams.
Amazon will start with an initial investment of $15 billion, followed by another $35 billion in the coming months when certain conditions are met, the companies said.
| A ticker | Security | Finally | Change | change % |
|---|---|---|---|---|
| AMZN | Company AMAZON.COM INC. | 207.92 | -2.72 |
-1.29% |
| NVDA | The company NVIDIA CORP. | 184.89 | -10.67 |
-5.46% |
| SOBKY | Company SOFTBANK CORP. | 13.635 | +0.15 |
+1.15% |
Amazon Web Services will also be the third-party cloud provider for OpenAI Frontier, ChatGPT’s enterprise platform for developers to build and deploy AI agents.
The partnership does not change OpenAI’s existing relationship with Microsoft, and Microsoft Azure remains the exclusive cloud provider for OpenAI’s APIs that provide access to OpenAI models, the companies said.
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OpenAI’s first-party products will continue to be hosted on Azure, and Microsoft retains its exclusive license and access to intellectual property for all OpenAI models and products.
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Nvidia’s investment in OpenAI gives the chip giant a financial stake in one of its biggest customers, furthering an already close relationship between two of the top players in the AI industry.
It also underscores a growing trend in the technology and AI industry where firms are investing in and signing supply deals with each other, raising concerns about “circular” financial deals.
It is not clear whether Nvidia’s investment of $30 billion has been replaced by his commitment announced in September when Nvidia would invest up to $100 billion initially.
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OpenAI and Nvidia did not immediately respond to Reuters requests for clarification.
ChatGPT now serves more than 900 million weekly active users, OpenAI said, adding that it now has more than 50 million consumers. January and February are likely to be the biggest months for new enrollees, he said.
Its AI-assisted coding product, Codex, is also up — weekly Codex users have tripled since the start of the year to 1.6 million, the company said.
