Nvidia CEO Jensen Huang characterizes his company’s $100 billion Openai investment as an opportunity to invest in the next “multiple dollars” company.
Nvidia itself is part of its club, with a market valuation of $4.5 trillion.
According to Huang, investments like Openai’s Nvidia are based on “trust in revenue” that the company can maintain.
Nvidia and Openai are already indirect collaboration through New Jersey-based cloud computer Darling Core Weave.
One of CoreWeave’s biggest investors? nvidia.
There are other players in the bushes. Oracle says it will spend around $40 billion on Nvidia’s chips to power one of Openai’s data centers.
Oracle and Openai are working with Japan’s Softbank Group on a plan to spend $500 billion on additional data centers on a project known as Stargate.
Nvidia is the “core technology partner” of Stargate trading. SoftBank owns $3 billion in Nvidia.
An Openai representative introduced NBC News in CFO Sarah Friar’s recent comments on CNBC. However, she did not directly address the “round” question.
Nvidia and CoreWeave declined to comment. Representatives from Oracle and SoftBank did not respond to requests for comment.
For some investment advisors, the Nvidia-Openai deal is particularly reminiscent of what was announced in its lead-up to the 2000 dot-com bubble burst.
That March, the high-tech Nasdaq Composite Stock Index fell 77%, wiping out billions of dollars in market value.
It will take another 15 years for the Nasdaq to return to its March 2000 high.
“There are healthy parts and unhealthy parts of the AI ​​ecosystem,” said Gil Luria, managing director of DA Davidson Financial Group, which covers technology.
The unhealthy parts are marked by “related party transactions” such that these companies are involved, he said.
If investors decide that the AI ​​giant’s relationship is getting too close, he said “there will be some contraction activity.” It’s the story of Wall Street for the Bubble bursting.
Altman recently tried to calm his looming fear of AI busts, suggesting that it is part of the lifecycle of all industry.
“There’s been a boom and bust decades ahead of the decades we’ve already been active,” Altman said last month on a tour of the large data center complex the Open is building in Abilene, Texas.
“People lose money due to overinvestment, and a lot of income due to underinvestment,” he said.
AI’s isolated trading and investment concerns outweigh the short-term potential of almost unimaginable profits.
Rather than worrying about whether AI is actually growing at a pace, many investors focus on whether companies can grow quickly enough and make enough profits to justify the mammoth investments that are being put into mammoth investment.
“To work without causing a huge loss, (Openai) and his associates will need to generate enormous income and profits to pay for all the obligations they are signing up for, and at the same time, return to investors.”
As long as tech companies’ valuations continue to surge into the stratosphere and investors continue to become richer, Wall Street has remained incentives to celebrate the boom and ignore the end-of-pocket scenario.
As of Wednesday, more than 35% of the market value of all companies on the S&P 500 Index (over $20 trillion) comes from seven high-tech companies known collectively as the “magnificent seven” on Wall Street.
And each of them – Apple, Google Parent Alphabet, Amazon, Facebook Parent Meta, Microsoft, Nvidia, Tesla, are deeply involved in AI projects.
