NVIDIA’s $100 billion deal with OpenAI is just another sign that tech leadership has changed

Shares of Nvidia dropped $5.18 or 2.82% on Tuesday as it closed the regular trading session at $178.43. The stock gave back more than the half of the 4% it rose on Monday following the company’s announcement that it will invest as much as $100 billion in ChatGPT parent OpenAI. This partnership will allow OpenAI to build datacenters powered by 10 gigawatts of “compute capacity” from NVIDIA’s AI systems.

Why GPUs are used in AI systems instead of CPUs

NVIDIA’s AI systems are built on the company’s GPU (Graphics Processing Unit) chips. We’ve explained it before, but it’s worth repeating. GPUs are used as AI accelerators because they excel in parallel processing. That means that with GPUs, multiple cores can be working on the same data at once. A CPU (Central Processing Unit) processes data sequentially. In other words, a CPU handles tasks one at a time.

The first phase to come online is expected to take place during the second half of 2026 and it will use the NVIDIA Vera Rubin platform. The latter is NVIDIA’s next generation of AI and data center platform and it will replace the Blackwell architecture. The Vera Rubin platform is named for one of the pioneers in astronomy and is built for large rack systems, not for a single chip. That gives the platform the ability to process large amounts of data at one time.

Both companies are excited to partner up to advance AI

Jensen Huang, founder and CEO of NVIDIA, said of the announcement, “NVIDIA and OpenAI have pushed each other for a decade, from the first DGX supercomputer to the breakthrough of ChatGPT. This investment and infrastructure partnership mark the next leap forward — deploying 10 gigawatts to power the next era of intelligence.”

Greg Brockman, cofounder and president of OpenAI, also spoke about the news. “We’ve been working closely with NVIDIA since the early days of OpenAI. We’ve utilized their platform to create AI systems that hundreds of millions of people use every day. We’re excited to deploy 10 gigawatts of compute with NVIDIA to push back the frontier of intelligence and scale the benefits of this technology to everyone.”

NVIDIA is riding the AI train and is now the most valuable U.S. publicly traded company

OpenAI has over 700 million weekly active users and the partnership with NVIDIA will help the company build AI solutions that will benefit all humanity. The deal is expected to be finalized over the coming weeks.

Microsoft has invested $13 billion in OpenAI, but instead of getting a certain percentage ownership in the firm, Microsoft has a profit-sharing agreement with a 49% share of OpenAI Global, LLC. That is the part of the company that is the for-profit unit of OpenAI. Microsoft keeps 49% of this unit’s profits every year until a certain cap is reached.

This is a serious change in leadership that should not be ignored and with deals like the one between NVIDIA and OpenAI, there is every reason to believe that we are only in the early innings of the AI game.

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