Cloudy Future for Nvidia-OpenAI Mega Deal

The tech world buzzed with excitement when Nvidia CEO Jensen Huang and OpenAI's Sam Altman stood side-by-side in San Jose two months ago, announcing what appeared to be a landmark $10 billion investment partnership. But the champagne may have been popped prematurely.

Image source note: The image is AI-generated, and the image licensing service is Midjourney

Fine Print Raises Eyebrows

Buried in Nvidia's recent quarterly filings lies a sobering disclaimer: "We do not guarantee that we will reach a final agreement with OpenAI." This cautious language contrasts sharply with the triumphant tone of the initial announcement.

The proposed deal would see Nvidia gradually fund OpenAI's AI supercomputing facilities as they come online. However, neither company has disclosed specific construction timelines or cost breakdowns - leaving industry watchers questioning when (or if) this money will actually change hands.

Parallel Partnerships Complicate Picture

While keeping investors cautious about the OpenAI deal, Nvidia continues writing big checks elsewhere. This quarter alone saw:

• A $5 billion commitment to Intel
• Up to $10 billion pledged to Anthropic

The chipmaker appears to be strategically deploying its growing cash reserves to support companies buying its GPUs - essentially betting on multiple horses in the AI race.

Meanwhile, OpenAI isn't putting all its eggs in Nvidia's basket either. The AI pioneer recently signed a firm agreement with AMD to deploy 6 gigawatts worth of AMD Instinct GPUs in coming years - a move that likely raised eyebrows in Nvidia's C-suite.

Growth Numbers Still Impress

Despite the contractual uncertainty, both companies continue touting impressive metrics:

• 800 million total OpenAI users
• 1 million enterprise customers
• Healthy gross margins maintained amid rapid scaling

"All of OpenAI's work is based on Nvidia's technology," Huang emphasized during earnings calls, perhaps signaling confidence that their technological entanglement makes divorce unlikely.

The coming months will reveal whether these tech titans can translate their warm words into binding commitments - or if this becomes another cautionary tale about announcements made before contracts are signed.

Key Points:

• Deal uncertainty: The much-touted $10B investment remains non-binding
• Competing partnerships: OpenAI's AMD deal adds complexity
• Strong fundamentals: User growth continues despite contractual questions