- Nvidia plans to invest $100B in OpenAI to fund large-scale data center development powered by its AI chips, potentially increasing US data center capacity by 25%.
- The deal represents one of the largest single investments yet in AI infrastructure, signaling that the data center boom tied to generative AI is still in its early stages.
- Tech giants including Amazon, Microsoft, Meta, and Google have already committed more than $300B to similar projects, with overall AI infrastructure spending projected to reach $4 trillion by 2030.
A $100B Bet On The Future Of AI
Nvidia is doubling down on its dominance in AI by committing a staggering $100B investment into OpenAI, reports CoStar. The funds will go toward developing massive data centers powered by Nvidia’s GPUs. Both companies say the expansion is essential to meet the growing global demand for artificial intelligence capabilities.
The new infrastructure will be built to handle up to 10 gigawatts of power. That’s roughly a quarter of the current total capacity in the US data center market, according to estimates from real estate firm Avison Young.
Scaling Up AI Infrastructure
This latest venture isn’t Nvidia and OpenAI’s first major infrastructure collaboration. They’re both already involved in Stargate, a $500B US data center initiative alongside Oracle and other AI players. However, the $100B deal marks a deeper alignment between the chipmaker and AI software developer to create purpose-built AI infrastructure at scale.
Nvidia CEO Jensen Huang called the partnership “the next leap forward to power the next era of intelligence,” estimating that global AI infrastructure spending could hit $4T by the end of the decade.
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Competitive Pressure Mounts
The race is on among tech heavyweights to secure the compute power needed to stay ahead in AI. Microsoft is on track to spend $30B this quarter alone. Amazon could spend up to $100B this year on AI-related infrastructure. Meanwhile, Meta, Google, and Elon Musk’s xAI are also accelerating their investments in data center expansion.
A recent JLL report predicts the tech industry could pour $1T into North American data centers over the next five years.
Real Estate And Power Challenges
Despite the optimism, major headwinds remain. Power and water supply constraints, rising construction costs, and lengthy permitting processes continue to slow data center development. Nvidia is already feeling the impact — the company posted its slowest growth since 2023 in the most recent quarter.
Still, both Nvidia and OpenAI are pressing forward. OpenAI has expanded its footprint by nearly 800K SF in under two years and plans to double its 2K-person workforce. Nvidia, meanwhile, has spent over $1B on real estate since last year, including recent investments near its Silicon Valley headquarters and in the UK.
Why It Matters
The Nvidia-OpenAI deal is a defining moment in the evolution of AI infrastructure. This partnership has the potential to consume energy on the scale of millions of homes. It also highlights how AI is becoming a major driver of large-scale commercial real estate development across the US.
Demand for compute power continues to outpace supply. As a result, more high-dollar partnerships and large-scale capital investments are expected in the years ahead — all focused on building the backbone of the AI economy.
