Nvidia's Jensen Huang Denies OpenAI Deal Rumors: 'There's No Drama'

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Nvidia CEO Jensen Huang Reassures on OpenAI Investment Amidst Rumor Mill

In a move aimed at quelling market speculation, Nvidia CEO Jensen Huang has emphatically stated that the chip manufacturing giant's substantial investment plans with artificial intelligence leader OpenAI are proceeding "on track." Huang directly confronted recent reports suggesting brewing tensions between the two tech titans, asserting that the partnership remains robust and unaffected by any alleged discord.

During an interview with CNBC's Jim Cramer on Tuesday, Huang addressed the concerns head-on. "There's no drama involved. Everything's on track," he declared, promising further details would be revealed in the full interview set to air later that day on "Mad Money." This clear statement seeks to provide much-needed clarity to investors and industry observers closely monitoring the fast-paced AI landscape.

The origins of these rumors trace back to September of the previous year, when Huang and OpenAI CEO Sam Altman jointly announced a letter of intent. This preliminary agreement outlined Nvidia's intention to invest up to a staggering $100 billion in the AI research lab, to be disbursed in tranches. The ambitious vision included OpenAI building its AI infrastructure centered around Nvidia's cutting-edge technology, a project requiring an immense power capacity of up to 10 gigawatts.

However, the narrative took a more complex turn in November when an SEC filing revealed that the deal had not yet been finalized. This disclosure fueled growing apprehension over the subsequent months, with many speculating that the initial announcement was little more than a public relations exercise. The situation was further amplified over the past weekend when The Wall Street Journal reported that the deal was effectively "on ice," intensifying concerns about the future of the collaboration.

The uncertainty surrounding the Nvidia-OpenAI partnership has had a tangible impact on the market. Nvidia shares experienced a notable decline, falling more than 3.4% during trading on Tuesday. This dip contributed to a broader downturn in the technology sector, with Nvidia's stock price receding 13% from its peak reached in October. This market reaction underscores the sensitivity of tech stocks to news concerning major strategic alliances in the burgeoning AI industry.

Underscoring Nvidia's unwavering commitment, Huang confirmed that the company intends to invest in OpenAI's upcoming fundraising round. He characterized this future round as potentially being the "largest private round ever raised in history." These statements come at a time when OpenAI is reportedly engaged in discussions to raise a substantial sum, potentially as much as $100 billion, according to CNBC's reporting last month.

"We will invest in the next round," Huang stated unequivocally. "There is no question about that." He further elaborated that Nvidia would be open to participating in any future funding rounds initiated by OpenAI and expressed a desire to be involved in the company's eventual initial public offering (IPO).

OpenAI has historically relied heavily on Nvidia's graphics processing units (GPUs) for the development and operation of its sophisticated AI models since its inception. This deep-seated relationship highlights Nvidia's critical role in providing the foundational computing power necessary for AI advancements.

However, in recent months, OpenAI CEO Sam Altman has publicly acknowledged challenges related to chip supply. Altman noted that OpenAI faces constraints in obtaining sufficient Nvidia chips to meet the soaring demand for its popular products like ChatGPT. He also suggested that increased computing power could unlock greater revenue potential for the company. Consequently, OpenAI has been actively pursuing chip supply agreements with Nvidia's competitors, including Advanced Micro Devices (AMD), Broadcom, and Cerebras, raising questions about the long-term exclusivity of its relationship with Nvidia.

Seeking to dispel the growing chatter and speculation, Altman took to the social media platform X (formerly Twitter) on Monday. Responding directly to the discussions surrounding OpenAI's relationship with Nvidia, he posted: "We love working with NVIDIA and they make the best AI chips in the world. We hope to be a gigantic customer for a very long time. I don't get where all this insanity is coming from."

The reciprocal affirmations from both Huang and Altman aim to reassure the market and reinforce the strategic importance of their partnership. While OpenAI navigates the complexities of scaling its operations and securing necessary hardware, Nvidia remains the cornerstone of its computational infrastructure. The clear messaging from both CEOs serves to stabilize perceptions, confirming that the foundational elements of their collaboration are strong and that ambitious future plans in the global AI race remain firmly on course.

Ekhbary News Agency