NVIDIA AI Investment on OpenAI: Is It Profitable?

NVIDIA’s $100 billion investment in OpenAI is shaking up the AI world. This NVIDIA-OpenAI partnership fuels massive data centers, but is it a smart move or a bubble waiting to burst? 

Let’s dive into the NVIDIA AI investment, explore OpenAI funding, and see if this bet on artificial intelligence pays off.

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Unpacking the NVIDIA-OpenAI Mega Deal

NVIDIA announced a jaw-dropping $100 billion investment in OpenAI on September 22, 2025, to build AI data centers with 10 gigawatts of power, enough for 8 million homes! 

Starting late 2026, millions of NVIDIA GPUs will power OpenAI’s Vera Rubin platform, pushing toward artificial general intelligence.

This isn’t just cash; it’s equity for non-voting shares, giving OpenAI access to NVIDIA’s top chips. With ChatGPT’s 700 million weekly users, this NVIDIA AI strategy aims to supercharge OpenAI growth.

Why OpenAI Needs NVIDIA’s Cash

OpenAI’s user base is exploding, but so are costs. A single gigawatt data center runs $50-60 billion, with $35 billion for NVIDIA GPUs alone.

Past OpenAI investors like Microsoft ($10 billion in 2023) helped, but this NVIDIA partnership OpenAI scales up to outpace rivals like Google.

Read Also: Will NVIDIA Stock Go Up to $192? Analyzing the Target from Analysts

Circular Investments: NVIDIA’s Money Loop

NVIDIA’s been investing in its own customers, creating a cycle where money flows back as GPU sales. 

The $100 billion OpenAI funding will partly return via GPU leases, not purchases. This NVIDIA AI dominance boosts revenue but raises questions about real demand in the AI boom.

Analysts call it “circular financing,” like lending money to buy your own product. It’s smart for NVIDIA machine learning growth but risks inflating valuations, echoing past tech bubbles.

CoreWeave: A Case Study in Circular Deals

NVIDIA’s 7% stake in CoreWeave ($3 billion) and a $6.3 billion cloud capacity deal show the pattern. CoreWeave bought 250,000 H100 GPUs for $7.5 billion. 

NVIDIA’s $1.3 billion cloud pact also loops money back. If demand drops, NVIDIA could be stuck with unsold chips.

Lambda and More: Expanding the Web

NVIDIA’s $1.3 billion deal with Lambda rents 10,000 GPUs, plus $200 million for 8,000 more. Lambda’s loans are backed by the GPUs themselves, a risky move. 

NVIDIA’s stakes in Arm, Intel ($5 billion), and others like Nebius and Recursion also feed this NVIDIA AI investment cycle.

Benefits Beyond Cash: Lower Costs, Bigger Reach

NVIDIA’s backing gives startups like OpenAI a leg up. They borrow at 6-9% rates (think Microsoft-level) instead of 15%, thanks to NVIDIA’s clout. 

It’s like a parent co-signing a loan, easing data center builds for OpenAI collaboration.

• Cheaper Loans: NVIDIA’s equity stakes help OpenAI and CoreWeave secure low-rate financing.

• Global Reach: In 2024, NVIDIA invested $1 billion in AI startups via NVentures, up from 2022’s ChatGPT boom.

Read Also: Is NVIDIA Being Investigated in China?

UK Investments: More NVIDIA GPUs

NVIDIA pledged £2 billion ($2.7 billion) to UK AI startups, including £500 million for Nscale’s data centers. 

These firms will likely buy NVIDIA GPUs, feeding the cycle. In 2025, NVIDIA’s 51 global deals show its aggressive NVIDIA AI innovation push.

Dot-Com Deja Vu: Bubble Risks

The dot-com bust saw telecoms like Cisco lend billions, over 10% of revenue, to buy their gear. When demand tanked, losses hit 90%. 

NVIDIA’s GPU leases to OpenAI dodge depreciation for them but burden NVIDIA. If AI hype fades, excess inventory could sting.

Analyst Stacy Rasgon flags “circular concerns.” NewStreet Research estimates $10 billion invested in OpenAI could yield $35 billion in GPU sales, 27% of NVIDIA’s last fiscal year revenue. That’s a 3.5x return, but only if demand holds.

Lessons from History

During the dot-com era, “roundtripping” deals, like Global Crossing’s, led to bankruptcy when revenue swaps collapsed. 

NVIDIA’s deals aren’t that blatant, but the pattern worries analysts. If AI stock news turns sour, NVIDIA’s $4.5 trillion market cap could wobble.

NVIDIA’s AI Dominance: Boom or Bust?

This NVIDIA-OpenAI deal cements NVIDIA’s lead in AI chips. Post-announcement, their market cap hit $4.5 trillion. 

But it’s “priced for perfection”, any hiccup, like slower AI adoption, could ripple through markets. Antitrust probes by DOJ/FTC also loom over NVIDIA AI strategy.

• Market Power: NVIDIA’s GPUs power most AI, from OpenAI to Google.

• Risky Bet: Overinvestment in a cooling market could lead to losses.

Read Also: How OpenAI’s Deep Research Agent Outperforms Competitors like DeepSeek

Conclusion

NVIDIA’s $100B OpenAI investment could drive $35B in GPU sales per $10B, fueling NVIDIA AI dominance. OpenAI’s 700M users signal growth, but circular deals raise dot-com bubble concerns. If AI slows, NVIDIA risks losses. 

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FAQ

Why did NVIDIA invest $100B in OpenAI?

To build massive 10GW AI data centers and lock OpenAI into NVIDIA’s GPU ecosystem.

What’s “circular financing” in NVIDIA’s strategy?

NVIDIA funds customers like OpenAI, who then spend that money back on NVIDIA GPUs, creating a money loop.

How does this deal compare to the dot-com bubble?

Similar patterns, companies financing their own demand. If AI slows, unsold GPUs could mirror the 2000's telecom crash.

What’s the financial risk for OpenAI data centers?

Each gigawatt costs $50–60B, with $35B just for GPUs, making operations extremely capital-heavy.

Could NVIDIA’s dominance face legal challenges?

Yes, antitrust probes from DOJ/FTC loom, as NVIDIA controls the majority of global AI chip supply.

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