OpenAI Puts $100B Nvidia Chip Deal on Hold
Photo by Jonathan Kemper (unsplash.com/@jupp) on Unsplash
"OpenAI has paused a planned $100 billion deal to purchase Nvidia chips, a person familiar with the matter said Thursday, as investor scrutiny of AI's financial risk to Big Tech intensifies.
"OpenAI has paused a planned $100 billion deal to purchase Nvidia chips, a person familiar with the matter said Thursday, as investor scrutiny of AI's financial risk to Big Tech intensifies.
The decision comes amid a period of intense investor scrutiny over the immense capital expenditures required to develop and run advanced AI models. According to a report from Yahoo Finance highlighted on Fosstodon, Wall Street’s yearslong bet on AI is now being viewed not just as a catalyst for growth, but as a potential source of systemic risk for Big Tech. This sentiment was echoed in a Wall Street Journal report, cited on Dev.to and Fosstodon, which first detailed the stalled investment plan from Nvidia.
The pause follows a series of internal shifts at OpenAI. The company recently announced the retirement of several key models, including GPT-4o, GPT-4.1, and GPT-4.1 mini, according to a post on its official blog that was widely shared, including on Hacker News. Concurrently, TechCrunch reported that OpenAI’s Sora video generation app is struggling to maintain momentum after its initial successful launch. The company has also throttled hiring, according to a discussion on Reddit’s r/LocalLLaMA forum.
Internally, CEO Sam Altman has reportedly been delivering blunt assessments of the AI industry’s near-term future. According to a translated account from a Russian tech blog shared on Fosstodon, Altman recently held a raw Q&A session with developers, dismissing simplistic narratives about AI and offering a pragmatic, sometimes uncomfortable view of the next 24 months. He addressed fears about the viability of programming jobs and the survival of startups in an AI-saturated market.
User dissatisfaction is also a factor. A user on X, cited on Fosstodon, issued a strong warning to Altman, threatening to cancel all subscriptions if the GPT-4o model was removed, citing bugs and restrictive 'nanny routing' policies. The post used the hashtag #keep4o, reflecting broader user frustration.
The shelving of a deal of this magnitude signals a potential inflection point for the generative AI sector. The planned $100 billion investment was seen as a cornerstone for OpenAI’s next phase of expansion, requiring vast resources for Nvidia’s advanced semiconductor chips. Its delay suggests a recalibration as companies face pressure to prove the economic viability of AI technologies beyond initial hype.
This development places immediate pressure on both companies. For Nvidia, which has seen its valuation soar on AI-driven demand, the loss of a landmark deal introduces uncertainty. For OpenAI, the pause coincides with product retirements and user discontent, forcing it to navigate its ambitious roadmap with potentially constrained resources. The industry will be watching closely to see if this is a temporary setback or a sign of a broader cooling in the AI arms race.