TL;DR

Nvidia is dropping its previously announced £74 billion investment in OpenAI, opting instead for a £22 billion contribution to the startup’s current funding round, which values OpenAI at £540 billion pre-money. Much of the investment is expected to flow back into Nvidia hardware purchases.

From £74 billion to £22 billion

The original multi-year deal, announced with fanfare in September, drew scepticism from analysts over its circular structure and vague terms — though investors were more enthusiastic, helping push Nvidia’s market capitalisation above £3.7 trillion weeks later. Reports in January suggested the agreement had stalled beyond a memorandum of understanding, with the Wall Street Journal describing it as “on ice.”

Nvidia is now in final-stage negotiations for the smaller £22 billion stake, with a deal expected imminently according to the Financial Times. The current investment may be followed by further equity deals.

A crowded funding round

The £22 billion from Nvidia forms part of a broader round set to raise over £74 billion for OpenAI. SoftBank is expected to invest £22 billion, while Amazon could contribute up to £37 billion as part of a wider arrangement potentially including access to OpenAI’s models. MGX, Microsoft, and several venture capital firms are also reported to be lining up investments.

OpenAI’s annualised revenue run rate has exceeded £15 billion, but that figure is dwarfed by £1.1 trillion in infrastructure and chip commitments with providers including AMD, Broadcom, and Oracle. The startup is expected to hold a public offering later this year.

Looking forward

The scaled-back deal reflects a more measured approach from Nvidia, even as the AI chip market remains intensely competitive. With much of the investment likely recycled into hardware purchases, the financial relationship between the two companies remains deeply circular.