OpenAI is planning even more mega deals ahead

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If you thought Silicon Valley’s chip wars were cooling down, think again. OpenAI just turned it into a soap opera. 

At practically the same moment, Nvidia CEO Jensen Huang was on live TV expressing surprise over OpenAI’s new multibillion-dollar deal with rival AMD, Sam Altman was somewhere else casually saying, “Oh, there are more deals coming.”

Huang, who appeared on CNBC’s Squawk Box on Wednesday, was asked whether he knew about the AMD arrangement. 

His response? A very unconvincing “Not really.” Ouch. Especially since Nvidia had just agreed to invest up to $100 billion into OpenAI.

The AMD partnership is a weird one, and by “weird,” we mean “financially complex enough to give accountants nightmares.” 

OpenAI will reportedly receive big chunks of AMD stock, as much as 10% of the company over time, in exchange for using and helping develop AMD’s next-generation AI chips. 

In short, OpenAI becomes a shareholder in AMD. Meanwhile, Nvidia’s deal works in reverse: Nvidia is now a shareholder in OpenAI. It’s a corporate trust fall, but with GPUs.

Huang explained that Nvidia will sell gear directly to OpenAI for the first time (previously, everything went through cloud partners like Microsoft and Oracle). 

The plan is to help OpenAI “self-host” its massive AI data centers someday. Right now, Huang admitted, OpenAI doesn’t actually have the money to buy all that hardware. 

Each gigawatt of AI infrastructure could cost $50–$60 billion, and OpenAI has already commissioned 10 gigawatts’ worth through its $500 billion “Stargate” project with Oracle and SoftBank.

That’s not counting the $300 billion cloud deal with Oracle or the 6 gigawatts promised to AMD. 

Add in Nvidia and a few European expansions, and OpenAI’s total commitments hit around $1 trillion this year.

Altman, meanwhile, told a16z’s podcast that this is just the beginning: “You should expect much more from us in the coming months.” (Via: TechCrunch)

The world’s biggest AI startup is still shopping, and the tech industry might want to check its wallet.