Nvidia's Historic Bet on OpenAI: Here's What We've Committed to AI's Future

At a tech conference in Taipei this weekend, Nvidia CEO Jensen Huang dropped a bombshell: the chip giant will make what he called “the largest investment we’ve ever made” by joining OpenAI’s latest funding round. While Huang stopped short of naming a specific figure, he emphasized the scale would be “huge,” signaling Nvidia’s unwavering confidence in the AI startup’s trajectory.

“We will invest a great deal of money,” Huang told reporters. “I believe in OpenAI. The work that they do is incredible. They’re one of the most consequential companies of our time.” This latest commitment adds another layer to an already complex partnership between the two companies—one that reveals both the extraordinary opportunities and potential pitfalls in today’s AI-driven market.

A Partnership Built on Mutual Need

Last September, Nvidia and OpenAI announced a landmark strategic collaboration that outlined Nvidia’s commitment to supply next-generation Vera Rubin graphics processing units (GPUs) for OpenAI’s ambitious 10-gigawatt AI data center expansion. As part of that deal, Nvidia indicated it would invest up to $100 billion as each facility came online.

Now, OpenAI is raising as much as $100 billion from a consortium of heavyweight investors including Microsoft, Amazon, and SoftBank. The funding push could value the company at $750 billion, making it one of the world’s most valuable private enterprises. Huang’s latest announcement suggests Nvidia sees this funding round as an opportunity to deepen its stake—though his recent comments that the investment would be “nothing like” $100 billion indicate a more measured approach than the previous arrangement suggested.

Recent reports had hinted that Nvidia might be reconsidering the scale of its commitment, with sources telling The Wall Street Journal that the earlier deal carried no binding obligations. When pressed on the matter, Huang dismissed such speculation outright: “That’s nonsense.” His forceful rebuttal underscores Nvidia’s resolve to remain entrenched in OpenAI’s success.

The Circular Gamble: Investors Start to Notice

Behind the headlines lies a structural concern that’s increasingly making investors uneasy. The relationship between OpenAI and Nvidia exemplifies what many are calling the “circular” nature of AI investments. Here’s how it works: OpenAI deploys Nvidia’s processors to build its infrastructure, then Nvidia turns around and invests billions into OpenAI. The circular dynamic raises a valid question—are these agreements genuinely reflecting market value, or are they artificially inflating demand in a self-reinforcing loop?

It’s a legitimate worry, especially when you consider that both companies benefit from each transaction, creating an incentive structure that may not reflect true market fundamentals.

The IPO Wild Card

Speculation is mounting that OpenAI may pursue an initial public offering (IPO) sometime this year, which would unlock another dimension to Nvidia’s investment thesis. Technology IPOs, particularly those in AI, historically generate outsized returns. Consider the track record: neo-cloud provider CoreWeave surged more than 125% following its March 2025 debut, while rival Nebius Group soared 368% when it resumed trading in late 2024. As an early investor with a meaningful stake, Nvidia could potentially harvest significant gains from an OpenAI IPO.

That said, venture into unproven territory comes with risks. Nvidia has previously invested in promising AI startups only to exit those positions later when circumstances shifted. Too many uncertainties remain to draw firm conclusions about whether this investment will ultimately prove prescient or merely opportunistic.

The Valuation Picture

From a pure valuation standpoint, Nvidia itself presents an intriguing case. The company trades at a price/earnings-to-growth (PEG) ratio of 0.8—well below the 1.0 threshold typically signaling an undervalued stock. Given its current momentum and projected growth trajectory, many see Nvidia as a compelling opportunity in its own right.

The parallels to earlier era-defining tech bets are striking. Netflix made The Motley Fool’s top-10 stock list on December 17, 2004; a $1,000 investment at that time would have ballooned to $450,256 today. Nvidia itself appeared on that same list on April 15, 2005, and a $1,000 position would have mushroomed to $1,171,666—a staggering testament to the power of backing transformative technology companies before they become household names.

What’s the Verdict?

The million-dollar question for investors: Should you buy Nvidia stock right now? The answer isn’t straightforward. While we’ve outlined the strategic logic behind the OpenAI investment and Nvidia’s attractive valuation, individual stock selection requires deeper analysis tailored to your portfolio and risk tolerance.

What’s clear is that Nvidia has positioned itself at the epicenter of the AI revolution—not just as a supplier of essential infrastructure, but as a co-investor betting on the sector’s most ambitious ventures. Whether this strategy pays off remains to be seen, but the company’s track record and current positioning suggest management we’ve seen, they understand how to navigate emerging technology landscapes.