"Last week it was reported that a much-discussed $100bn deal announced last September between Nvidia and OpenAI might not be happening at all. This was a circular arrangement through which the chipmaker would supply the ChatGPT developer with huge sums of money that would largely go towards the purchase of its own chips. It is this type of deal that has alarmed some market watchers, who detect a whiff of the 1999-2000 dotcom bubble in these transactions."
"Now it seems that Nvidia was not as solid on this investment as had been widely believed, according to the Wall Street Journal. Negotiations had not progressed, with Jensen Huang, Nvidia's chief executive, privately emphasising that the deal was non-binding and not finalised. Huang appeared to confirm this in Taipei on Saturday, telling reporters that Nvidia would make a huge investment into OpenAI's next funding round, but nothing like $100bn."
A proposed $100bn investment from Nvidia into OpenAI now appears unlikely. The arrangement would have had Nvidia provide funds that OpenAI would largely spend on Nvidia chips, creating a circular transaction. Some market watchers compared such deals to the 1999–2000 dotcom bubble. Nvidia described negotiations as non-binding and unfinished, with its CEO saying any investment would be far smaller than $100bn. Reuters reported OpenAI was dissatisfied with Nvidia's advanced AI chips and was exploring alternatives. Nvidia's stock fell about 10%. Sam Altman and Oracle issued statements reaffirming ongoing commercial ties. OpenAI's compute commitments exceed $1tn.
Read at www.theguardian.com
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