TLDR
- NVIDIA stock jumped 4% after announcing up to $100 billion investment in OpenAI partnership
- Deal includes deploying at least 10 gigawatts of compute capacity using millions of NVIDIA GPUs
- First phase expected online in second half of 2026 using Vera Rubin platform
- Separate $5 billion investment in Intel for CPU collaboration and AI PC development
- Analysts estimate the OpenAI deal could generate up to $500 billion in revenue for NVIDIA
NVIDIA stock surged Monday after the AI chipmaker announced a massive partnership with OpenAI worth up to $100 billion. The deal represents what CEO Jensen Huang called “the biggest AI infrastructure project in history.”
The partnership centers around deploying at least 10 gigawatts of compute capacity from NVIDIA’s AI systems. This capacity will power OpenAI’s next generation of artificial intelligence models including ChatGPT.
The scale of this project is enormous. To put it in perspective, Meta’s massive AI data center in Louisiana will deliver about two gigawatts of capacity. NVIDIA and OpenAI are promising five times that amount.
The first phase will come online in the second half of 2026. It will use NVIDIA’s upcoming Vera Rubin platform to deliver the initial gigawatt of capacity.
According to CFRA analyst Angelo Zino, the 10 gigawatt plan would require 4 million to 5 million NVIDIA GPUs. Bank of America analyst Vivek Arya believes the deal could generate as much as $500 billion in revenue for the chipmaker.
NVIDIA’s stock closed Monday at $183.61, hitting a new record high. The company’s market value now exceeds $4 trillion, making it the world’s most valuable company.
Intel Partnership Adds CPU Flexibility
Days before the OpenAI announcement, NVIDIA unveiled another major partnership. The company will invest $5 billion in Intel at $23.28 per share, pending regulatory approval.
Under this deal, Intel will design and manufacture custom x86 data center CPUs for NVIDIA’s AI infrastructure. Intel will also build system-on-chips that include NVIDIA RTX GPU chiplets for personal computers.
This partnership gives NVIDIA more flexibility in CPU supply chains. It also strengthens the company’s position in AI PCs, which could expand its addressable market.
The Intel collaboration represents another step in NVIDIA’s rapid expansion of AI investments. The company recently signed a $6.3 billion deal with CoreWeave to purchase unsold compute capacity.
Strong Financial Performance Supports Growth
NVIDIA’s latest financial results support these ambitious partnerships. Second quarter revenue rose 56% year-over-year to $46.7 billion. Data center revenue also jumped 56% to $41.1 billion.
The company guided for third-quarter revenue of about $54 billion. Management expects non-GAAP gross margins around 73.5% and margins in the mid-70s by year-end.
NVIDIA expanded its share repurchase authorization by $60 billion in August. The company returned $24.3 billion to shareholders in the first half of the year.
However, some analysts express caution about the OpenAI deal structure. DA Davidson analyst Gil Luria worries that NVIDIA has become the “investor of last resort” for OpenAI’s ambitious commitments.
OpenAI recently signed a $300 billion deal with Oracle for computing power over five years. The company also committed $25 billion to CoreWeave and plans to spend $100 billion on backup cloud servers.
NVIDIA’s stock remains expensive despite recent pullbacks. At current prices, investors are betting on years of outsized growth and sustained leadership in AI systems.
The company faces ongoing challenges including export restrictions to China and intensifying competition. Rival chipmakers and large customers are developing alternative accelerators and custom silicon.
NVIDIA did not assume any H20 chip shipments to China in its latest outlook. Export restrictions continue to complicate certain shipments to the region.
Production of the new Blackwell platform is ramping quickly according to management. Huang described demand as “extraordinary” for what he called the AI platform the world has been waiting for.
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