Nvidia Could Get 2% Stake in OpenAI From $10 Billion Investment
Nvidia has committed to investing the first $10 billion of a planned $100 billion investment in OpenAI at the startup’s recent $500 billion valuation and then will make the remaining staggered investments at future valuations, according to a person with direct knowledge of the plans.
The chip giant is making the investment in cash and will receive equity in OpenAI as part of the deal. Based on OpenAI’s recent valuation in an employee share, Nvidia would get about 2% of the company from the first $10 billion invested.
Earlier Monday, both companies said Nvidia would make a $100 billion investment to support 10 gigawatts of data center capacity for OpenAI. Nvidia will make the investment as each gigawatt comes online. This structure should limit the amount of dilution other OpenAI investors experience, assuming the valuation of OpenAI continues to rise.
By the end of this year, OpenAI will have raised over $70 billion since its founding, including an investment by Nvidia last fall when OpenAI was valued at $157 billion. OpenAI needs to support the immense costs of training and running its models, which the company has projected will cost at least $450 billion through 2030. OpenAI is in the middle of a restructuring that could pave the way for an eventual public offering.