"Earlier on Monday, Nvidia and OpenAI announced that they'd signed a letter of intent to pursue the $100 billion deal. The goal is to produce Nvidia-equipped data centers with a capacity of at least 10 gigawatts of power. The infrastructure will be used to develop and run artificial intelligence models. Nvidia chips have become the most prized commodity in Silicon Valley in recent years, with data center operators scrambling to obtain as many as possible."
"The frenzy has sent the company's sales and stock price soaring. It now boasts the world's largest market capitalization, at nearly $4.5 trillion. Chief Executive Officer Jensen Huang has sought to keep the growth run going by expanding the chipmaker's customer base. For all its success, Nvidia still relies on a small group of companies including Microsoft Corp., Meta Platforms Inc., Amazon.com Inc. and Alphabet Inc. for much of its revenue."
"Those companies are locked in direct competition to build AI infrastructure as fast as possible and draw more people to their services. They're all also deploying or developing their own components in an attempt to reduce reliance on Nvidia. Fears over the loss of priority could prompt customers to ramp up those efforts or look more seriously at alternatives from would-be competitors such as Advanced Micro Devices Inc."
Nvidia and OpenAI signed a letter of intent for a $100 billion partnership to build Nvidia-equipped data centers with capacity of at least 10 gigawatts. The planned infrastructure will develop and run artificial intelligence models. Nvidia stated investments will not change its focus or impact supply to other customers and that every customer will remain a top priority. Nvidia chips have become highly sought after, driving soaring sales and a market capitalization near $4.5 trillion. Much revenue still derives from a small group of large cloud and tech companies that are racing to build AI infrastructure and develop in-house components, which could accelerate alternatives such as AMD.
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