Despite "controversy over perception," Bank of America: Nvidia will make 3-5 times profit on this "$100 billion investment" in OpenAI.
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Bank of America believes that Nvidia’s move to invest $100 billion in OpenAI is expected to bring Nvidia $300 to $500 billion in future revenue and secure its dominant position in AI infrastructure development.
On September 22, according to Wallstreetcn, Nvidia and OpenAI signed a memorandum of understanding to establish a strategic partnership. Nvidia will invest up to $100 billion in OpenAI, and OpenAI will use Nvidia’s systems to build and deploy at least 10 gigawatts (GW) of AI data centers.
According to Hard AI, Bank of America subsequently released a research report estimating that this cooperation could generate about $300 billion to $500 billion in cumulative revenue for Nvidia in the future, while directly raising competitive barriers against rivals such as Broadcom and AMD.
The report points out that although this move may raise questions of “client financing” in terms of optics, it is essentially a strategic equity investment intended to secure OpenAI as a priority strategic partner, thus further strengthening Nvidia’s absolute dominance in AI computing and networking.
Interpreting the “Client Financing” Controversy: A Strategic Equity Investment
Such a large-scale investment in a major client may naturally lead to outside concerns about accounting treatment and true intentions.
However, Bank of America analysts clarified this issue. Their core assumption is that Nvidia will treat this investment similarly to other large-scale equity investments (such as in CoreWeave), and that OpenAI will be considered a normal commercial customer.
To help investors better understand the scale of the transaction, the report includes a key comparative analysis.
Although the potential cumulative revenue of $300 billion to $500 billion sounds enormous, the report anticipates that Nvidia’s total revenue in the calendar years 2026 to 2030 may be three times this amount.
From this perspective, OpenAI’s share of Nvidia’s total sales will be between 15% and 25%. This is comparable to several other major cloud customers currently served by Nvidia, meaning OpenAI will become another core large customer for Nvidia, rather than a structural “outlier”.
Not “Subsidizing Clients,” But a Strategic Deployment of Free Cash Flow
Bank of America analysts further point out that this investment is essentially a strategic deployment of the company’s massive free cash flow (FCF).
The report forecasts that, based on Nvidia’s revenue scale of up to $200 billion and a free cash flow profit margin of 40%-50%, the company will generate hundreds of billions of dollars in free cash flow in the coming years.
In the current environment, investing in other publicly traded assets is difficult due to a lack of strategic fit and cumbersome regulatory processes. Therefore, aside from returning cash to investors, the best option is to invest in the ecosystem in which the company operates.
Bank of America believes that such ecosystem investments can bring multiple benefits:
Expand the potential market size, creating multiple times the future returns.Accelerate time to market for new products.Obtain political benefits, such as the recent investment in Intel.
Therefore, investment in OpenAI is by no means a simple “subsidy”; rather, it is a wise initiative by Nvidia to actively shape and expand its future market by utilizing its strong cash-generating ability.
This article comes from the WeChat public account “Hard AI”. For more frontier AI news, please visit here
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