Nvidia (NVDA) and OpenAI’s strategic partnership marks a significant progression in AI infrastructure, as they plan to deploy over 10 gigawatts of computing power by late 2026. This collaboration is essential for OpenAI, allowing immediate access to Nvidia’s proven technology while it develops its own custom chips. The deal aligns with the ambitious $500 billion Stargate U.S. infrastructure plan, enhancing Nvidia’s revenue visibility. While competition is tightening, with AMD pushing its MI300 and MI350 offerings, Nvidia’s investments bolster its ecosystem, including a $5 billion stake in Intel.
The partnership indicates a shift in power dynamics, from chip availability to electricity constraints, as U.S. data centers are projected to consume up to 12% of national energy by 2028. Consequently, Nvidia is investing up to $100 billion in OpenAI’s growth, solidifying its market position. Despite its premium valuation, the prospects for Nvidia remain optimistic amidst increasing AI demands.
Source link
