Nvidia just threw $100 billion at OpenAI and everyone's acting like this is normal business. This is basically Nvidia buying their biggest customer but with enough legal paperwork to maybe slip past the FTC.
The Circular Investment Problem
Nvidia gives OpenAI $100 billion. OpenAI uses that money to... buy Nvidia chips. This is basically Nvidia funding their own chip sales. When I explained this structure to a corporate lawyer, her exact words were "that sounds like it should be illegal somehow."
Bernstein analyst Stacy Rasgon called this "circular" investment, and when Wall Street analysts are publicly calling your deal sketchy, you know it's bad.
The first $10 billion drops in 2026 for non-voting shares. Then OpenAI can start buying Nvidia's new Vera Rubin chips – the same chips that cost more than most people's houses and require enough electricity to power a small city.
Sam Altman said "everything starts with compute," which is true. But when your compute supplier owns a piece of your company, "everything" includes your strategic independence.
The Infrastructure Arms Race Is Getting Insane
I've been tracking these AI infrastructure announcements for months, and the numbers keep getting more ridiculous. Meta claims they're spending $600 billion through 2028 but when I called their investor relations team for specifics, I got transferred three times and never got a callback.
Oracle allegedly cut some massive cloud deal with OpenAI - I've seen numbers ranging from $200B to $500B but nobody will confirm anything on the record. Larry Ellison's team declined to comment when I asked for verification.
Microsoft already burned through $10+ billion on OpenAI and still doesn't seem to control their roadmap. Amazon threw around $8 billion at Anthropic, but that's tied to using AWS infrastructure.
Jensen Huang keeps throwing around trillion-dollar numbers - could be $3T, could be $5T, could be complete bullshit for all we know. The man's worn the same leather jacket to every keynote since 2008, so I can't tell if he's a genius or just really consistent with his wardrobe choices.
Where the Hell Are the Regulators?
The FTC has been making noise about AI monopolies since 2024, and this deal is basically Nvidia and OpenAI giving them the middle finger. But will they actually do anything? Probably not.
This kills OpenAI's partnerships with Broadcom and TSMC on custom chips. Why build your own silicon when your new investor already makes the best GPUs? Broadcom's stock dropped like a rock after the announcement.
I tried getting the FTC to comment but they just sent the usual "we don't comment on ongoing matters" non-answer. Cool, so we're just gonna let two companies control the future of AI and hope for the best.
The Power Grid is Fucked
Ten gigawatts of AI infrastructure sounds impressive until you realize that's enough power for 8 million homes. Our electrical grid was designed for air conditioners and dishwashers, not training LLMs that suck down electricity like a black hole.
Elon's xAI already violated the Clean Air Act with their Memphis data center. Meta had to partner with nuclear plants just to power their Louisiana facility.
Nobody's talking about what happens when all these AI data centers come online at once. We're basically rebuilding the entire power grid so chatbots can help people write marketing emails.
Everyone Else is Fucked
If you're running an AI startup and you're not OpenAI, good luck. How the hell do you compete for Nvidia chips when your biggest competitor owns a chunk of Nvidia's investment portfolio?
Google Cloud is trying to sign smaller AI companies, but those deals don't come with $100 billion in funding. It's like bringing a knife to a nuclear fight.
The whole industry is consolidating:
- Anthropic rewrote Amazon's Trainium chip drivers to work with their models
- Microsoft is looking for OpenAI alternatives but good luck finding anything that competes
- Every AI startup is either getting acquired or dying
Bottom Line
Nvidia's stock jumped 4.4%. Oracle gained 6%. Wall Street loves monopolies when you dress them up as "partnerships."
So now two companies control most of AI development and can coordinate strategy while claiming they're independent. It's probably illegal, but the money's already flowing and nobody seems to give a shit about antitrust anymore.