Nvidia CEO Huang Expresses Surprise Over AMD’s Smart Move Offering OpenAI 10 Percent Stake

Nvidia CEO Reacts to AMD’s Bold Partnership with OpenAI
AMD and OpenAI’s Groundbreaking Deal
Nvidia CEO Jensen Huang expressed surprise over the recent announcement that Advanced Micro Devices (AMD) offered 10% of its company to OpenAI during their multibillion-dollar partnership reveal. In a conversation with “CNBC’s Squawk Box,” Huang commented, “It’s imaginative, it’s unique and surprising, considering they were so excited about their next-generation product.” The collaboration, unveiled earlier this week, marks an intriguing strategic move by AMD.
Key Details of the OpenAI-AMD Agreement
The agreement outlines OpenAI’s commitment to purchasing 6 gigawatts of AMD chips over multiple years, including the upcoming MI450 series. In exchange, OpenAI will receive warrants for up to 160 million AMD shares, contingent on deployment volume and stock price. Should OpenAI exercise these warrants fully, it could obtain nearly 10% ownership in AMD.
- OpenAI’s chip purchase: 6 gigawatts over several years
- AMD series involved: MI450
- Stock shares for OpenAI: Up to 160 million AMD shares
Market Reactions and Industry Implications
Following the deal’s announcement, AMD shares surged, achieving an 11% rise on Wednesday and a remarkable 43% increase throughout the week. Nvidia shares also rose by 2% after Huang’s remarks. This partnership challenges Nvidia’s leading position in the AI chip industry, compelling AMD to close the gap while cloud providers simultaneously work on their chip development.
Nvidia’s Strategic Moves with OpenAI and Beyond
Nvidia, however, is not standing still. Late last month, the company announced plans to invest up to $100 billion in OpenAI over the coming decade. This move involves building and deploying Nvidia systems utilizing 10 gigawatts of power, translating to between 4 million and 5 million GPUs. Huang emphasized that Nvidia’s approach significantly differs from AMD’s by enabling direct sales to OpenAI’s ChatGPT.
Huang also addressed OpenAI’s financing capabilities, noting that “they don’t have the money yet,” implying that OpenAI would need to raise funds through revenue growth, equity, or debt. He added, “They gave us the opportunity to invest alongside other investors when the time comes,” expressing his only regret being not investing more previously.
Investments in AI Infrastructure
Jensen Huang also confirmed Nvidia’s participation in xAI’s recent fundraising round led by Elon Musk, which aims to secure around $20 billion. Nvidia plans to contribute $2 billion, showcasing its ongoing commitment to support innovative ventures. Further bolstering its position in the AI ecosystem, Nvidia has partnered with AI data center operator CoreWeave, marking it as one of several “terrific investments” in the company’s portfolio.
Company | Investment |
---|---|
xAI (Elon Musk) | $2 billion |
CoreWeave | Ongoing support |
These actions exhibit Nvidia’s strategic positioning within the global AI infrastructure landscape and its determination to foster indispensable partnerships across the industry.