CNBC has confirmed that Nvidia is negotiating to invest up to $30 billion in OpenAI as part of a financing round that would potentially value the artificial intelligence company at a pre-money valuation of up to $730 billion.
A source familiar with the matter reported that the investment from the $100 billion infrastructure agreement that OpenAI and Nvidia announced in September is different. It was stated that the $30 billion is not pegged to any deployment milestones.
The September announcement that shocked the tech industry and fueled a series of follow-up infrastructure deals detailed a plan in which Nvidia would invest in OpenAI over several years as it deployed new supercomputing online facilities.
A source informed CNBC that Nvidia’s initial investment of $10 billion would be deployed when its first gigawatt was completed. Nvidia has invested $30 billion in OpenAI, rather than what was considered in September, but the company may still make an investment in further rounds in line with such a framework.
However, the $30 agreement is not final, and the details are still subject to change. The potential investment was first reported in the Financial Times. Nvidia declined to comment on the matter.
Inquiries have been rife in recent months regarding the status of OpenAI and Nvidia about its $100 billion infrastructure deal, especially following the Wall Street Journal’s reporting in January that the deal was “on ice.”
Nvidia had earlier estimated in its quarterly financial report in November that it could “no assurance that we will enter into definitive agreements with respect to the OpenAI opportunity or other potential investments.”
OpenAI CEO Sam Altman made an attempt to dismiss his worries about the deal, posting in an X (formerly known as Twitter) that the company enjoys doing business with Nvidia and that he doesn’t “get where all this insanity is coming from.”
Nvidia CEO Jensen Huang also covered the possible rift in a previous interview with CNBC’s Jim Cramer earlier this month, and he affirmed that there was “no question” that the company would invest in OpenAI’s next funding round.
CNBC previously stated that other investors are also discussing fundraising with OpenAI, and the overall round may reach some $100 billion. The negotiations have been speeding up in recent weeks, but they have yet to be closed.
CNBC previously indicated that the funding round of the startup may take place in two stages, with the first round being investments by the strategics such as Amazon, Microsoft, and Nvidia. It would be followed by other contributions by a wider range of investors.
