Nvidia and OpenAI Inc. Propose $100 Billion GPU Partnership

Nvidia Corporation and OpenAI Inc. proposed a $100 billion partnership where OpenAI Inc. pays for GPUs in cash, and Nvidia reinvests those funds back into OpenAI Inc. as non-controlling shares. The arrangement surfaced as OpenAI Inc. seeks a $500 billion valuation and Nvidia's market capitalization briefly reached $4.5 trillion.

The deal has sparked a debate among investors and analysts regarding the sustainability of the AI market. Critics, including fund manager James Anderson and GMO portfolio manager Tom Hancock, likened the structure to vendor financing, a practice associated with the dot-com bubble of the late 1990s. They warned that such arrangements can create artificial revenue and signal a potential AI bubble.

Other market observers have dismissed these concerns. Analysts from Wedbush and Goldman Sachs, along with billionaire Mark Cuban, cited a long-term tech bull market and high demand for AI infrastructure as justifications for the current growth trajectory.