OpenAI is reportedly set to receive a $30 billion (about 43 trillion won) investment from Nvidia. That is a sharp reduction from the previously announced $100 billion (about 144 trillion won).
Nvidia is finalizing negotiations for a $30 billion equity investment in OpenAI, which is currently raising funds, the Financial Times (FT) reported on the 19th (local time), citing people familiar with the matter. The two companies switched to a simple equity investment instead of the previously announced long-term $100 billion capital commitment, the sources said.
Initially, the two companies announced last September that Nvidia would invest $10 billion in OpenAI in 10 tranches, and OpenAI would use the funds to make large purchases of artificial intelligence (AI) chips, including Nvidia's graphics processing units (GPUs). But despite the fanfare, the agreement remained at the letter of intent (LOI) stage and did not lead to a formal contract. FT analyzed that the original plan was affected by dampened investor sentiment around the AI boom, including a 17% decline in tech stocks in the U.S. stock market this year.
Earlier, the Wall Street Journal (WSJ) reported last month that the transaction was "on hold," saying the two companies were experiencing discord.
Nvidia Chief Executive Officer Jensen Huang denied the rift reports immediately after they were published, saying, "We are going to make an enormous investment in OpenAI." In fact, the latest OpenAI capital injection is the largest investment Nvidia has made to date. OpenAI CEO Sam Altman also dismissed the rift reports, saying, "Nvidia makes the world's best AI chips, and we love working with Nvidia."
The negotiations between the two companies are now in the final stage, and the investment could be completed as early as this weekend, according to the sources.
OpenAI is also negotiating fundraising with Amazon, SoftBank, the United Arab Emirates (UAE) state fund MGX, and Microsoft (MS), among others. Amazon is reportedly considering an investment of up to $50 billion. OpenAI plans to raise more than $100 billion in this funding round, and once the fundraising is completed, the company's valuation is expected to rise from the previous $500 billion to $730 billion (about 1,055 trillion won).