Nvidia CEO Jensen Huang has privately played down likelihood original deal will be finalized, although the two companies will continue to have a close collaboration
The companies unveiled the giant agreement last September at Nvidia’s Santa Clara, Calif., headquarters. They announced a memorandum of understanding for Nvidia to build at least 10 gigawatts of computing power for OpenAI, and the chip maker also agreed to invest up to $100 billion to help OpenAI pay for it. As part of the deal, OpenAI agreed to lease the chips from Nvidia.
At the time, the ChatGPT-maker expected the deal negotiations to be completed in the coming weeks, people familiar with the plans said. But the talks haven’t progressed beyond the early stages, some of the people said.
Now, the two sides are rethinking the future of their partnership, some of the people said. The latest discussions, they said, include an equity investment of tens of billions of dollars as part of OpenAI’s current funding round.
Archived: https://archive.ph/iOuh5
Both sides announced this to boost their share prices as they’re both growth stocks. Growth stocks are a trap - no company can keep on growing forever.
This announcement is a sign the AI boom is probably soon to end. Nvidia quietly announcing the $100bn deal isn’t going to happen, is Nvidia trying to reduce it’s exposure to the bubble popping. Unfortunately for Nvidia, it’s already way way too deep into the mess, and the vast majority of it’s value is speculative. The question is have they damaged their core business by chasing the AI bubble, and what liabilities will they be left with if their customers go bankrupt and don’t pay them for their product.