A Wall Street Journal report on Friday said Nvidia insiders had expressed doubts in regards to the transaction and that Huang had privately criticized what he described as an absence of discipline in OpenAI’s business approach. The Journal also reported that Huang had expressed concern in regards to the competition OpenAI faces from Google and Anthropic. Huang called those claims “nonsense.”
Nvidia shares fell about 1.1 percent on Monday following the reports. Sarah Kunst, managing director at Cleo Capital, told CNBC that the back-and-forth was unusual. “One among the things I did notice about Jensen Huang is that there wasn’t a powerful ‘It would be $100 billion.’ It was, ‘It would be big. It would be our biggest investment ever.’ And so I do think there are some query marks there.”
In September, Bryn Talkington, managing partner at Requisite Capital Management, noted the circular nature of such investments to CNBC. “Nvidia invests $100 billion in OpenAI, which then OpenAI turns back and provides it back to Nvidia,” Talkington said. “I feel like that is going to be very virtuous for Jensen.”
Tech critic Ed Zitron has been critical of Nvidia’s circular investments for a while, which touch dozens of tech firms, including major players and startups. Also they are all Nvidia customers.
“NVIDIA seeds firms and provides them the guaranteed contracts crucial to lift debt to purchase GPUs from NVIDIA,” Zitron wrote on Bluesky last September, “Regardless that these firms are horribly unprofitable and can eventually die from an absence of any real demand.”
Chips from other places
Outside of sourcing GPUs from Nvidia, OpenAI has reportedly discussed working with startups Cerebras and Groq, each of which construct chips designed to cut back inference latency. But in December, Nvidia struck a $20 billion licensing take care of Groq, which Reuters sources say ended OpenAI’s talks with Groq. Nvidia hired Groq’s founder and CEO Jonathan Ross together with other senior leaders as a part of the arrangement.
In January, OpenAI announced a $10 billion take care of Cerebras as a substitute, adding 750 megawatts of computing capability for faster inference through 2028. Sachin Katti, who joined OpenAI from Intel in November to guide compute infrastructure, said the partnership adds “a dedicated low-latency inference solution” to OpenAI’s platform.
But OpenAI has clearly been hedging its bets. Beyond the Cerebras deal, the corporate struck an agreement with AMD in October for six gigawatts of GPUs and announced plans with Broadcom to develop a custom AI chip to wean itself off of Nvidia dependence. When those chips will likely be ready, nevertheless, is currently unknown.
