NVIDIA Shares Decline as Pledge to OpenAI Investment Undergoes Scrutiny

NVIDIA shares fell early Monday as investors considered the company’s plan to make a large investment in OpenAI, the maker of ChatGPT.

The stock dropped 2.3% to $186.81 in morning trading.

Focus has shifted to the relationship between Nvidia and OpenAI after a report on Friday said talks for Nvidia to invest up to $100 billion in the AI company have stalled since the deal was announced in September, according to people familiar with the situation.

If Nvidia shows doubts about OpenAI’s future, it could affect the broader AI industry. OpenAI has about $1.4 trillion in capital commitments and major cloud and semiconductor deals with companies like Microsoft, Oracle, CoreWeave, Advanced Micro Devices, and Broadcom.

Nvidia’s CEO has raised concerns about the competition OpenAI faces from companies like Google and Anthropic, and said the investment agreement is still non-binding, according to the Friday report.

NVIDIA did not comment on Monday morning. But on Saturday, the company’s CEO told reporters in Taipei that NVIDIA plans to join OpenAI’s next funding round, which could be its biggest investment so far.

This investment would be larger than Nvidia’s $20 billion licensing deal with AI chip startup Groq, which is currently its biggest single investment. OpenAI is valued at nearly $500 billion, and executives said its annual revenue topped $20 billion last year. The company’s CEO expects annual revenue could reach $100 billion by 2027.

OpenAI may go public as soon as the fourth quarter of this year and is seeking up to $100 billion in new funding at a projected $830 billion valuation before the listing. According to The Information, NVIDIA is considering investing up to $30 billion in OpenAI’s capital raise.