Nvidia’s OpenAI Partnership Poised to Unleash AI’s Most Lucrative Profit Engine Ever

Silicon Valley's power duo just rewrote the rulebook on monetizing artificial intelligence.

The Unstoppable Alliance

Nvidia's chips and OpenAI's algorithms form a symbiotic relationship that's crushing competitors. Their collaboration creates a self-reinforcing cycle—better hardware accelerates smarter software, which in turn demands more advanced processors.

The Profit Multiplier Effect

Every breakthrough in generative AI directly translates to increased demand for Nvidia's high-performance computing infrastructure. The partnership effectively positions Nvidia as the picks-and-shovels supplier to the entire AI gold rush.

Market Domination Strategy

While other chipmakers scramble to catch up, this alliance keeps setting new performance benchmarks that leave rivals playing catch-up. The timing couldn't be more perfect—or more frustrating for investors who missed the early signs.

Wall Street's favorite new narrative conveniently ignores how concentrated this profit engine really is—but then again, who needs diversification when you're printing money? The partnership doesn't just lead the AI race; it's redesigning the track.

Image source: Getty Images.

Nvidia and OpenAI

First, a little background on both Nvidia and OpenAI. Nvidia, as mentioned, is the world's No. 1 AI chip designer, offering the top performing graphics processing units (GPUs) to power crucial AI tasks. Among its biggest customers are leading tech and AI players, fromto, that aim to use the best possible tools to power their AI projects.

OpenAI also is a Nvidia customer, and like Nvidia, is central to the AI story. That's because OpenAI is the research lab that developed and owns popular chatbot ChatGPT -- today OpenAI reaches more than 700 million weekly active users. This AI giant isn't publicly traded but has significant partnerships in the tech world -- for example, it launched earlier this year the Stargate Project to build U.S. AI infrastructure withand-- and Microsoft has invested about $13 billion in OpenAI.

Moving on to the latest news, Nvidia this week said it will invest as much as $100 billion in OpenAI's buildout, an effort that will involve the deployment of an enormous amount of Nvidia computing power. The Nvidia platform will use 10 gigawatts of power -- that's the equivalent of 4 million to 5 million GPUs, Nvidia chief Jensen Huang, calling the deal a "giant project," told CNBC.

The investment will be made in installments, with the first $10 billion to come once the first gigawatt is complete, CNBC also reported, citing a person familiar with the project.

A path to GPU purchases

This Nvidia partnership with OpenAI is an enormous win for both of these AI players. For OpenAI, it ensures the funding needed to build out infrastructure, and therefore continue to advance its research, increase its user base, and generate revenue growth. For Nvidia, this cements its position as a key OpenAI partner, with the research lab receiving funding from Nvidia, then going on to buy GPUs from the chip giant. As this project advances, involving two of the biggest AI names in the world, this relationship should supercharge revenue at both OpenAI and Nvidia.

An additional benefit for Nvidia is this MOVE strengthens its market position, showing investors who have worried about the company's future growth that it isn't likely to be unseated by rivals or forced to lower the prices of its GPUs to keep up.

Finally, it's important to consider this latest partnership in the context of the full picture. Nvidia recently made another important move, investing into secure that company's top central processing units (CPUs) for Nvidia platforms and to offer Nvidia GPU chiplets for Intel PC systems. This strengthens Nvidia's current offerings and broadens its customer base.

These decisions are putting this dominant AI company on track to maintain its leadership and significantly increase revenue in the upcoming phases of the AI story. And the latest deal with OpenAI, involving enormous future orders for Nvidia GPUs to power this data center empire, is on its way to becoming the biggest profit driver in the history of AI.