The AI industry’s power couple is fighting behind closed doors, and investor portfolios might feel the impact.
Remember September’s grand announcement? Jensen Huang and Sam Altman shaking hands over a $100 billion partnership that would deploy 10 gigawatts of Nvidia data centers to power OpenAI’s next-generation models. The tech press ate it up. Nvidia’s stock jumped. The AI hype machine cranked another notch higher.
Fast-forward to January, and the fairy tale is cracking. According to Wall Street Journal reports, Huang has been privately criticizing OpenAI’s “lack of discipline” while talks stall over the massive infrastructure deal. That September handshake? Still just a letter of intent with no binding agreement signed.
Technical Tensions Surface
OpenAI explores alternatives while performance issues plague consumer AI tools.
The drama runs deeper than corporate egos. While details remain unverified, reports suggest OpenAI has been testing alternative chip systems from companies like Cerebras and Groq for some inference workloads. Laggy ChatGPT responses during peak hours highlight the performance pressures facing AI companies, even as OpenAI executives publicly call Nvidia their “most important partner.”
The Money Trail Goes Cold
Nvidia’s CFO admits no deal exists while stock prices lived on promises.
By December, Nvidia CFO Colette Kress quietly confirmed what insiders suspected: “We still haven’t completed a definitive agreement.” The $100 billion commitment that boosted investor confidence was essentially tech industry vaporware—ambitious plans tied to uncertain data center capacity and energy availability. Nvidia stock gains were built on corporate wishful thinking.
Bubble Vibes Intensify
AI’s circular funding arrangements echo past tech crashes.
This mess highlights the AI industry’s increasingly sketchy financial dependencies:
- Nvidia invests in OpenAI
- OpenAI buys Nvidia chips
- This justifies Nvidia’s valuation
- Which funds more OpenAI investments
It’s giving serious dot-com bubble energy, where interconnected deals propped up valuations until reality intervened. With OpenAI facing stiff competition from Google and Anthropic, Huang fears OpenAI’s struggles could crater Nvidia’s sales projections.
What Happens Next
Smaller investments likely as both companies manage expectations.
Huang publicly pushed back against the stalled-talks narrative during a Taipei appearance, insisting Nvidia will “definitely participate” in OpenAI’s funding rounds as “such a good investment.” Translation: expect smaller equity stakes in the tens of billions rather than the headline-grabbing $100 billion infrastructure play.
AI tools investment strategies just got a reality check, but the underlying partnership endures—just with less fairy dust and more corporate pragmatism.
