even after stargate, oracle, nvidia, and amd, openai has more big deals coming soon, sam altman says

OpenAI Secures Multiple Chip Deals with Nvidia and AMD

Concurrent with Nvidia CEO Jensen Huang’s expressed astonishment regarding OpenAI’s substantial agreement with AMD, Sam Altman indicated that further collaborations of this nature are anticipated.

Nvidia CEO’s Reaction and the AMD Partnership

Huang appeared on CNBC’s Squawk Box on Wednesday and stated he was largely unaware of the AMD deal prior to its public announcement.

The OpenAI-AMD agreement is noteworthy. AMD will provide OpenAI with significant portions of its stock – potentially up to 10% over several years, dependent on stock performance. In return, OpenAI will utilize and contribute to the development of AMD’s upcoming AI GPU chips, effectively becoming an AMD shareholder.

Contrasting Deals: Nvidia vs. AMD

This arrangement differs from Nvidia’s involvement. Nvidia has made a financial investment in OpenAI, acquiring a stake in the AI model developer.

While OpenAI has consistently leveraged Nvidia hardware via cloud service providers such as Microsoft Azure, Oracle OCI, and CoreWeave, Huang clarified, “This marks the first instance of a direct sale to them.” He also confirmed Nvidia will maintain its supply relationships with the cloud providers.

Preparing for Self-Sufficiency

These direct sales, encompassing AI hardware beyond GPUs – including complete systems and networking infrastructure – are designed to “position” OpenAI for a future where it operates as an independent “self-hosted hyperscaler,” according to Huang. This implies a transition to utilizing its own dedicated data centers.

Huang acknowledged that OpenAI currently lacks the necessary capital to fully finance this hardware acquisition. He projected that establishing a single gigawatt of AI data center capacity would require an investment of “$50 to $60 billion,” covering land, power, servers, and equipment.

Massive Data Center Investments

To date, OpenAI has committed to 10 gigawatts of U.S. data center capacity through its $500 billion Stargate initiative with Oracle and SoftBank in 2025. A separate $300 billion cloud agreement is also in place with Oracle.

The partnership with Nvidia encompasses at least 10 gigawatts of AI data centers, while the AMD collaboration covers 6 gigawatts. Furthermore, OpenAI’s “Stargate UK” initiative involves expanding data center infrastructure in the United Kingdom, alongside other commitments in Europe. Estimates suggest OpenAI has secured approximately $1 trillion in such deals this year.

Criticism of the Deal Structures

Similar to the AMD agreement, Nvidia’s deal has faced scrutiny, with some characterizing it as “circular,” as reported by Bloomberg. Critics contend that Nvidia is effectively financing OpenAI’s purchases in exchange for equity.

Sam Altman's Vision: Anticipate Further Developments

While Jensen Huang was analyzing the infrastructure requirements of OpenAI during a CNBC interview, a conversation with OpenAI CEO Sam Altman on the a16z Podcast, hosted by Andreessen Horowitz, became available.

Ben Horowitz, a co-founder of a16z, conveyed to Altman his appreciation for the enhancements in their deal structuring. Given Andreessen Horowitz’s investment in OpenAI, such a positive assessment isn't unexpected.

OpenAI has successfully devised a strategy to potentially secure billions of dollars worth of equipment without bearing the full financial burden, and this is being done consistently.

Responding to inquiries about these recent agreements, Altman indicated that further announcements are forthcoming. “You should expect much more from us in the coming months,” he stated.

Altman anticipates that OpenAI’s future models and forthcoming products will possess significantly increased capabilities, leading to a substantial surge in demand.

This expectation has prompted a decision to make a substantial and proactive investment in infrastructure, as he clarified. The company believes a significant infrastructure upgrade is now necessary.

Currently, OpenAI’s revenue does not yet reach $1 trillion, although it is experiencing rapid growth, with projections estimating $4.5 billion in revenue for the first half of 2025.

However, Altman expresses strong confidence that these investments will ultimately generate returns. “I’ve never been more confident in the research road map in front of us and also the economic value that will come from using those [future] models,” he affirmed.

He emphasized that OpenAI cannot achieve this growth independently.

“To make the bet at this scale, we kind of need the whole industry, or big chunk of the industry, to support it,” Altman explained. This support encompasses everything from the provision of electricity to the distribution of models. “So we’re going to partner with a lot of people,” he added, anticipating more deals in the near future.

Therefore, the technology sector should prepare for continued activity from OpenAI as they actively pursue partnerships and agreements.