Nvidia Pivots to $30B Equity Stake in OpenAI as $100B Mega-Deal Dissolves

The recalibration of the partnership between Nvidia and OpenAI marks a significant turning point in the capitalization of the generative AI sector. By replacing a non-binding $100 billion letter of intent with a firm $30 billion equity investment, Nvidia is signaling a preference for direct ownership over complex, long-term infrastructure commitments. The original deal, struck in September 2024, was an ambitious multi-year arrangement that would have seen Nvidia invest $10 billion annually in exchange for OpenAI deploying massive compute capacity and purchasing millions of chips. However, the transition to a direct equity stake suggests that both parties now prioritize immediate liquidity and balance sheet clarity over the previous staggered model.

This strategic shift is occurring against a backdrop of significant market volatility. Since the beginning of 2026, U.S. technology stocks have retreated by approximately 17%, reflecting growing investor skepticism regarding the high valuations of AI companies and the sustainability of massive infrastructure spending. In this environment, the 'circular economy' of AI—where chipmakers invest in their own customers to fuel hardware demand—is coming under increased scrutiny. By moving to a $30 billion equity stake within a broader $100 billion funding round, Nvidia secures its position as OpenAI's primary hardware provider while mitigating the risks associated with a decade-long $100 billion commitment that was increasingly difficult to justify to shareholders in a cooling market.

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The broader funding round, which could reach $100 billion in total new capital, values OpenAI at a staggering $730 billion pre-money and approximately $830 billion post-money.

The broader funding round, which could reach $100 billion in total new capital, values OpenAI at a staggering $730 billion pre-money and approximately $830 billion post-money. This valuation places OpenAI among the most valuable corporate entities globally, rivaling the market caps of established tech giants. The participation of SoftBank, which is reportedly in final negotiations for its own $30 billion stake, and the potential involvement of Amazon, underscores the high stakes of this round. For SoftBank’s Masayoshi Son, this represents a return to aggressive, large-scale tech bets, while for Amazon, it may be a defensive move to ensure its own cloud services remain competitive with OpenAI’s evolving infrastructure needs.

For OpenAI, the influx of cash is critical for its 'Stargate' and other massive-scale compute projects. The company plans to reinvest much of this capital back into Nvidia hardware, effectively guaranteeing Nvidia a massive order book for its next-generation Blackwell and Rubin architectures. This creates a powerful feedback loop: Nvidia provides the capital that OpenAI uses to purchase Nvidia's high-margin chips, which in turn drives Nvidia’s revenue and justifies its own market leadership. However, this arrangement also highlights the dependency OpenAI has on a single hardware provider, even as competitors like AMD and startups like Cerebras and Groq attempt to chip away at Nvidia’s dominance.

Looking forward, the success of this $30 billion investment will depend on OpenAI’s ability to translate massive compute power into sustainable revenue growth. As the industry moves from the 'training' phase of large language models to the 'inference' and 'application' phases, the pressure on Sam Altman and his team to deliver commercial breakthroughs will intensify. Investors will be watching closely to see if the gigawatts of new compute capacity promised by this deal result in a new generation of AI products that can justify an $830 billion valuation. For now, the deal reinforces the symbiotic, if increasingly expensive, relationship between the world’s most valuable chipmaker and its most prominent AI software partner.