Jensen Huang: The $30 billion investment in OpenAI might be the last one, rules out the possibility of investing $100 billion.

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Jensen Huang stated that with OpenAI preparing to go public within the year, Nvidia’s window for large-scale equity investment may soon close.

On Wednesday, March 4th, Nvidia CEO Jensen Huang said at the Morgan Stanley Technology, Media & Telecom Conference that Nvidia’s recent $30 billion investment in OpenAI “may be” the last investment. The reason is OpenAI plans to go public, possibly by the end of this year.

Jensen Huang also stated:

I think the opportunity to invest $100 billion in OpenAI may not come again. So this might be our last chance to invest in such a significant company.

WallstreetCN mentions that OpenAI announced last week the completion of an $110 billion fundraising, of which Nvidia contributed $30 billion, bringing OpenAI’s valuation to $730 billion.

Although this is Nvidia’s largest single investment in a startup to date, it is far less than the $100 billion fundraising amount considered when the agreement with OpenAI was reached in September.

Huang also mentioned that Nvidia’s $10 billion investment in OpenAI’s competitor Anthropic may also be the last. These remarks did not dampen market sentiment. During Wednesday’s New York trading session, Nvidia’s stock price once rose by more than 2.6%.

Hundred Billion Dollar Agreement Falls Through

The vision for large-scale investment cooperation between Nvidia and OpenAI can be traced back to September last year.

At that time, both parties announced an agreement under which Nvidia would continue to invest as OpenAI builds new supercomputing facilities in phases, with a cumulative limit of up to $100 billion. This attracted wide attention in the tech industry and led to a series of subsequent infrastructure agreements.

However, Nvidia first signaled in its quarterly report last November that the previously announced $100 billion deal was at risk of falling through. The agreement was “put on hold” in January of this year.

In its February quarterly report, Nvidia again warned with similar wording, stating that there is “no guarantee” the company will reach “an investment and cooperation agreement with OpenAI, or complete related transactions.”

$30 Billion Is Still Nvidia’s Largest Single Startup Investment

Despite the scale being much lower than originally envisioned, Nvidia’s $30 billion investment in OpenAI still sets a company record for single investment in a startup.

This investment is part of OpenAI’s $110 billion funding round announced last month. The round valued OpenAI at $730 billion and also included $50 billion from Amazon and $30 billion from Softbank.

Unlike previous arrangements that were phased according to the deployment progress of supercomputing facilities, Nvidia’s $30 billion investment is not linked to any milestone indicators.

As supporting terms of the agreement, OpenAI receives 3GW dedicated inference computing power and 2GW training computing power on Nvidia’s Vera Rubin system for its AI data center operations.

As for Anthropic, Nvidia and Microsoft jointly announced an investment plan last November, with a contribution of $10 billion. Anthropic is also preparing for an independent IPO.

Jensen Huang Counters “Bubble Theory”

Faced with some investors’ concerns over Nvidia’s aggressive investments in AI startups, Jensen Huang directly responded to “capital bubble” doubts at the conference.

He reiterated that the deployment of AI computing power is already bringing substantial profit and revenue to enterprises, including large listed data center operators like Microsoft.

He believes that if these customers can access more computing power, their performance growth will be even faster; if computing power triples, their revenue is expected to triple as well.

He also stated that automation design software and system providers such as Cadence and Synopsys will become “bigger and more important” in the future. Following this remark, both companies’ stock prices surged briefly.

He stated that the industry as a whole is still at the starting point of a massive growth cycle. As for Nvidia itself, Jensen Huang was quite confident:

We just experienced the best financial quarter in our history.

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