Nvidia Invests $20 Billion in OpenAI After Deal Tensions

Nvidia Commits $20 Billion to OpenAI's Mega Funding Round

In a dramatic turnaround from recent tensions, Nvidia has confirmed it will invest $20 billion in OpenAI's massive funding round, according to multiple reports from February 2026. The deal represents a significant commitment from the AI chip giant, though it falls far short of the $100 billion investment that was reportedly discussed earlier.

From Tensions to Investment

The investment comes after weeks of uncertainty about the relationship between the two AI powerhouses. Just days before the announcement, reports suggested the deal was 'on ice' following concerns from Nvidia CEO Jensen Huang about OpenAI's business discipline and growing competition from rivals like Google.

According to Reuters, the $20 billion investment would be Nvidia's largest ever in another company and represents a strategic partnership that could reshape the AI landscape. OpenAI is seeking to raise up to $100 billion in total funding, which would value the ChatGPT maker at approximately $830 billion.

Background of the Partnership

Nvidia, founded in 1993 by Jensen Huang, Chris Malachowsky, and Curtis Priem, has become the dominant force in AI chips, controlling over 80% of the market for GPUs used in training AI models. The company reached a $5 trillion market capitalization in 2025, driven by explosive demand for AI hardware.

OpenAI, established in 2015 with backing from Sam Altman, Elon Musk, and others, has revolutionized AI with products like ChatGPT, DALL-E, and Sora. The company's mission to develop 'safe and beneficial' artificial general intelligence has made it one of the most influential AI research organizations globally.

Recent Tensions and Resolution

The investment follows a period of public tension between the companies. In early February, CNBC reported that Huang had to publicly deny rumors of strained relations, stating: 'There's no drama. We want to participate in any future OpenAI funding rounds and an eventual IPO.'

OpenAI had reportedly been exploring alternatives to Nvidia's chips due to concerns about inference speed performance, particularly for its Codex AI tool. The company signed deals with Cerebras for $10 billion worth of computing capacity and with AMD for 6 gigawatts of GPUs, while also developing custom AI chips with Broadcom.

Market Impact and Future Implications

The investment signals Nvidia's confidence in OpenAI's future despite recent challenges. OpenAI projects $14 billion in losses for 2026 alone and expects cumulative losses of $115 billion through 2029 before reaching profitability in the 2030s, according to industry reports.

Tech analyst Maria Chen commented: 'This $20 billion investment is a strategic move that benefits both companies. Nvidia secures a major customer for its chips, while OpenAI gets crucial funding and technical partnership. It's a classic case of mutual dependence in the AI ecosystem.'

The partnership comes at a critical time for both companies. OpenAI faces intensifying competition from Google's Gemini and Anthropic's Claude models, while Nvidia must defend its dominant market position against challengers like AMD and custom chip developments by major tech companies.

Looking Ahead

With this investment, Nvidia and OpenAI appear to have moved past their recent tensions to forge a stronger partnership. The $20 billion commitment, while significantly less than originally discussed, still represents one of the largest investments in AI history and underscores the enormous financial stakes in the industry.

As Huang stated in recent interviews: 'We're taking it step by step to determine how much investment is appropriate. This $20 billion represents our confidence in OpenAI's vision and our commitment to advancing AI technology together.'