Nvidia CEO Jensen Huang Rules Out $100 Billion OpenAI Investment
Nvidia Corp. Chief Executive Jensen Huang has definitively ruled out the possibility of his company investing up to US$100 billion in OpenAI, the artificial intelligence startup behind ChatGPT. Huang made these remarks during a Morgan Stanley conference held in San Francisco on Wednesday, where he addressed investor concerns and outlined Nvidia's strategic position in the rapidly evolving AI landscape.
OpenAI's IPO Plans Influence Investment Decision
Huang explained that the opportunity to invest such a massive sum in OpenAI is "probably not in the cards" due to OpenAI's plans to go public, potentially by the end of this year. "So this might be the last time we'll have the opportunity to invest in a consequential company like this," Huang stated, highlighting the shifting dynamics as OpenAI prepares for an initial public offering. This announcement comes after Nvidia contributed US$30 billion to a US$100 billion funding round for OpenAI last month, which valued the startup at an impressive US$730 billion.
While this investment represented Nvidia's largest single bet on a startup to date, it fell significantly short of the up to US$100 billion that the chipmaking giant had previously considered as part of a pact with OpenAI in September. The smaller-than-anticipated investment has raised questions about the relationship between the world's dominant chipmaker and the leading AI company. However, Huang has consistently praised OpenAI's work, describing it as "incredible" and calling the firm "one of the most consequential companies of our time" as recently as January 31.
Defending AI Investments Against Bubble Concerns
During the conference, Huang also addressed broader investor concerns about Nvidia's investments in AI companies like OpenAI and Anthropic, where Nvidia recently made a US$10 billion investment. He suggested that the Anthropic investment might similarly be "the last" in that company, as Anthropic—maker of the Claude AI platform—has also laid groundwork for its own IPO. Some investors have expressed fears that such substantial capital deployment signals an AI bubble, but Huang vigorously defended these investments.
He reiterated his argument that the deployment of AI computing is already generating profitable revenue for companies, including large publicly traded data center operators like Microsoft Corp. Huang contended that if these customers could access more computing power, they would grow even more rapidly, suggesting that tripling computing capacity could potentially triple their sales. He also highlighted companies such as Cadence Design Systems Inc. and Synopsys Inc.—providers of automated design software and computers—as becoming much larger and more important in the future, remarks that briefly lifted their stock prices.
Nvidia's Historic Performance and Future Outlook
Huang touted Nvidia's own historic results, declaring, "We just had the best earnings of earnings in the history of earnings." He emphasized that the AI industry is only at the beginning of a substantial growth run, expressing confidence in Nvidia's continued success. "I'm sure somebody had better returns. But anyways, we had a very good quarter. Listen, you can't hold a stock back," Huang remarked optimistically.
His comments helped drive Nvidia shares up by as much as 2.6 percent in New York trading on Wednesday, despite the company's latest earnings report having previously received a somewhat chilly response from investors. OpenAI declined to comment on Huang's specific remarks regarding the investment limitations. The conference appearance provided Huang with a platform to reinforce Nvidia's strategic vision while managing expectations about future investments in key AI partners as the industry continues to mature and companies move toward public markets.
