Three days ago, it was announced that Nvidia (NVDA) has agreed to invest $100 billion in OpenAI, potentially marking the largest private-company deal on record. Nvidia will buy non-voting shares in OpenAI, and in return, the ChatGPT maker will use the funds to purchase millions of Nvidia chips. The two firms plan to build at least 10 gigawatts of computing power, with the first gigawatt expected to be ready by late 2026. That amount of power could light up more than 8 million homes in the U.S.
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The move highlights the increasing expense of competing in artificial intelligence. The cost of chips, data centers, and power now forces only a handful of companies to play at the top level.
Antitrust and Market Impact
However, this deal between two AI giants has raised some concerns; Nvidia holds between 80% and 95% of the market for chips used in AI data centers, while OpenAI is one of the leading developers of AI models. Legal experts point out that when one company funds another while also selling its critical hardware, the deal can tilt the field. Andre Barlow, an antitrust lawyer, told Reuters the deal “raises significant antitrust concerns.” Rebecca Haw Allensworth, an antitrust professor at Vanderbilt, also noted that Nvidia and OpenAI are “financially interested in each other’s success,” which creates incentives that may hurt rivals.
Regulators in Washington have already split oversight duties for the AI sector. The Department of Justice looks into Nvidia, while the Federal Trade Commission focuses on OpenAI and its partner Microsoft (MSFT). The Justice Department has stressed that it wants to prevent unfair limits on access to key tools like chips and data centers. Investors, however, welcomed the news. Nvidia’s stock rose more than 3% after the deal and added about $200 billion in market value, pushing the firm closer to a $4.5 trillion valuation.
Is Nvidia Stock a Buy?
Nvidia continues to hold the Street’s endorsement with a Strong Buy consensus rating. The average NVDA price target is $212.06, implying a 19.83% upside from the current price.
