OpenAI deal could add $35B to Street numbers for Nvidia, says Barclays

After OpenAI and Nvidia (NVDA) announced a strategic partnership to deploy at least 10GW of AI data centers with Nvidia systems, Barclays analyst Tom O’Malley said today’s announcement shows that “we are in a compute bonanza.” While Broadcom’s (AVGO) $10B deal announcement with OpenAI for custom silicon came first a few weeks ago, general purpose silicon will run the majority of OpenAI workloads at least through the end of this decade and general purpose silicon is “most certainly not dead,” the analyst added. Based on commentary from the company’s Q2 earnings, the analyst estimates 1GW is the equivalent of about $35B-plus in revenue to Nvidia, so the firm doesn’t think Nvidia is “getting enough credit” as this deal is entirely incremental and could add $35B to Street numbers. Barclays keeps an Overweight rating and $200 price target on Nvidia shares.