Nvidia Corp. will invest as much as $100 billion in OpenAI to support new data centers and other artificial intelligence infrastructure, a blockbuster deal that underscores booming demand for AI tools like ChatGPT and the computing power needed to make them run.

The companies announced the agreement Monday, saying they’d signed a letter of intent for a strategic deal. The investment is meant to help OpenAI build data centers with a capacity of at least 10 gigawatts of power — equipped with Nvidia’s advanced chips to train and deploy AI models.

The money will be provided in stages, with the first $10 billion coming when the deal is signed, according to people familiar with the matter. Nvidia is making the investment in cash and will receive OpenAI equity as part of the deal, said the people, who asked not to be identified because the talks were private. Further increments will follow when each gigawatt of computing power is deployed.

Investors applauded the tie-up, sending Nvidia shares up 3.9% in New York trading. The stock has now gained about 37% this year, cementing the company’s status as the most valuable business on Earth. OpenAI, meanwhile, is the world’s biggest tech startup. Bloomberg News reported last month that it was in early talks about a stock sale valuing the company at $500 billion.

The companies are helping lead a global push to build data centers for a new generation of AI tools — an undertaking that is expected to cost trillions of dollars in total. The effort requires advanced chips, servers, cooling systems and enormous amounts of electricity.

The scope of the Nvidia-OpenAI endeavor would be particularly massive: Ten gigawatts is equivalent to the peak electricity demand of New York City.

“This investment and infrastructure partnership mark the next leap forward — deploying 10 gigawatts to power the next era of intelligence,” Nvidia Chief Executive Officer Jensen Huang said in a statement.

Nvidia has been using its financial might to make sure the company’s technology remains at the heart of AI systems. With the OpenAI deal, it’s strengthening ties with a vital ally. The startup makes the market-leading chatbot and is working to expand its own AI infrastructure. The agreement signals that OpenAI will remain a key Nvidia customer, even as the company seeks other suppliers.

Nvidia also has positioned itself as a champion of domestic technology infrastructure — a priority of the Trump administration. The Santa Clara, California-based chipmaker has been working to build goodwill with the White House at a time when it needs Washington to ease China export restrictions.

Last week, Nvidia agreed to invest as much as $5 billion in Intel Corp., the long-struggling chipmaker that is now partially owned by the US government.

On Monday, OpenAI CEO Sam Altman said the Nvidia deal would lead to new AI breakthroughs by securing the necessary computing power.

“Everything starts with compute,” he said in the statement. “Compute infrastructure will be the basis for the economy of the future.”

OpenAI’s ChatGPT is used by roughly 700 million people weekly and takes an intensive amount of computing power to service and build its products. In the past, the company has faced computing constraints in its ability to meet customer demand, particularly around new releases. On Sunday, Altman posted on social media that his company will be launching some new “compute-intensive” product offerings in the next few weeks.

Nvidia and OpenAI didn’t provide details on the investment in OpenAI or when it would occur. Representatives for Nvidia declined to comment.

In the statement, the companies said they “look forward to finalizing the details of this new phase of strategic partnership in the coming weeks.”

According to Huang, the project will encompass as many as 5 million of Nvidia’s chips, a number that’s equal to what the company will ship in total this year. He called it a “giant project” in an interview on CNBC.

Nvidia was also part of recent deals to expand the computing infrastructure in the UK, France and the Middle East, and has backed a number of AI startups.

Huang “appears to be on a deal tear at the moment,” said Stacy Rasgon, an analyst at Bernstein Research. “The magnitude of this OpenAI partnership appears to dwarf all the others, though.”

The revenue impact from the partnership is likely to be larger than the investment itself, he said. One gigawatt worth of data center power would probably involve several tens of billions of dollars of Nvidia products, Rasgon said.

The company ended its most recent quarter with $56.8 billion of cash and equivalents, and Chief Financial Officer Colette Kress said this month that Nvidia would use its growing financial strength to help speed up the deployment and use of AI computing.

Nvidia dominates the market for AI accelerators, the powerful chips that help develop and run AI models. Its growing influence over the tech industry has drawn scrutiny, with the U.S. Justice Department probing last year whether the chipmaker violated antitrust laws. U.S. President Donald Trump even mused about breaking up Nvidia to increase competition, but acknowledged it would be hard for rivals to catch up.

Monday’s deal is the latest big-budget data center agreement to be announced this year. OpenAI and Oracle Corp. forged a partnership to build 5 gigawatts of data center capacity, including a facility under construction in Abilene, Texas, as part of a project branded as Stargate.

In January, OpenAI, Oracle and SoftBank Group Corp. said they would invest $500 billion in 10 gigawatts of computing power in the next four years.

Separately, Oracle is talking with Meta Platforms Inc. to provide $20 billion of cloud computing power. Meta also is building a massive data center in Louisiana that is expected to provide as much as 5 gigawatts’ worth of capacity. It’s backed by at least $29 billion in financing.

Earlier this month, Microsoft Corp. struck a multiyear deal worth almost $20 billion to get cloud computing power for its AI workloads from Nebius Group NV and said it would rent $6.2 billion of AI computing power in Norway. In just the September quarter alone, Microsoft said it would spend $30 billion to build out its data centers.

At the same time, there have been concerns that the AI spending surge will contribute to a market bubble — something akin to the dot-com boom and bust. Altman himself acknowledged the existence of a bubble last month but argued that AI will provide transformative value to the economy and that smaller, overvalued startups are the ones most at risk.”

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With assistance from Dina Bass, Mark Chediak and Naureen S. Malik.

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