The bar for AI investment has been raised — and reset — simultaneously. Nvidia’s reported $30 billion equity stake in OpenAI replaces a much larger but fundamentally compromised $100 billion deal and, in doing so, resets expectations for what credible investment in the AI sector should look like. The new deal is smaller in headline value but far greater in substance.
The $100 billion deal it replaces was never what it appeared to be. Structured as an arrangement in which Nvidia would fund OpenAI’s chip purchases — effectively funding its own sales — it was criticized as circular from the moment of its announcement. Despite that, the deal generated enormous market enthusiasm, briefly making Nvidia the world’s most valuable company by a significant margin. The deal’s collapse this month demonstrated the cost of financial theater at scale: market disruption, damaged credibility, and the need for a more honest starting point.
That honest starting point is the new $30 billion equity deal. Nvidia invests real capital in exchange for real ownership. OpenAI receives those funds without restriction. No chips need to be purchased; no commitments need to be fulfilled beyond the financial terms of the investment itself. It is the kind of deal that should have been announced in the first place.
OpenAI’s position in the market provides both reason for confidence and reason for caution. The company commands a $730 billion expected valuation in the current round — a figure that reflects enormous investor appetite — but that valuation sits atop a business that is losing market share, spending heavily, and still searching for a scalable profit model. Enterprise markets, once ChatGPT’s strength, are now contested by Anthropic. Advertising is being tried. Alternative revenue streams are being explored.
The full $100 billion funding round involves other major investors including SoftBank, Microsoft, and Amazon, though the specific terms of each contribution remain in flux. What is becoming clear is that the AI investment community is beginning to demand — and get — deals that are real rather than performative. Nvidia’s $30 billion is the best evidence yet that this shift is underway.