Nvidia’s Huang surprised AMD by offering 10% of the company to Openai

Nvidia CEO Jensen Huang said Wednesday he was surprised Advanced small appliances It offered 10% of itself to Openai as part of a Multi-million dollar partnership Announced earlier this week.

“It’s iconic, it’s unique and surprising, given that they were so excited about the next generation product,” Huang said in an interview with CNBC’s Squawk Box. “I’m surprised they would give away 10% of the company before they built it. So anyway, it’s smart, I think.”

Openai and AMD reached a deal on Monday, with Openai committing to purchase 6 Gigawatts of AMD chips over several years, including the upcoming MI450 series. As part of the agreement, Openai will receive warrants for up to 160 million AMD shares, with milestones based on deployment volume and AMD stock price.

If Openai exercises the full warrant, the company could gain a roughly 10% ownership in AMD.

The deal challenges Nvidia’s dominance in the AI ​​chip industry, a market in which AMD has sought to catch up, along with cloud providers that are developing their own chips.

Nvidia announced late last month that it plans to invest even more 100 billion dollars in Openai over the next decade. Openai has agreed to build and deploy Nvidia systems that require 10 gigawatts of power, which Huang said at the time of the announcement was between 4 million and 5 million graphics processing units (GPUs).

Huang said the investment is “completely different” from Openai’s deal with AMD because it allows NVIDIA to sell directly to the creator of ChatGPT.

Nvidia’s investment in Openai confirms concerns about… “Circular nature” From some AI infrastructure deals.

When asked how the deal with Nvidia would be financed, Huang said, “They don’t have the money yet.”

“They will have to raise this money, first and foremost, their revenues, which are growing significantly, equity or debt,” Huang said. “They give us the opportunity to invest alongside other investors when the time comes.”

Huang added that after Nvidia had previously invested in Openai, “the only regret is that we didn’t invest more.”

Huang also confirmed Nvidia’s participation in Xai’s recent funding round, which Elon Musk’s AI company is seeking to raise about $20 billion, according to Bloomberg. He said he was “very excited” about the funding opportunity, adding that he wished he could give Musk more money.

“It’s almost all that you’re a part of, you really want to be a part of it too,” Huang said.

Nvidia also backed the AI ​​data center operator Koroevwhich Huang said is one of several “fantastic investments” the company has made recently.

“(They’re) really private companies, and they’re building, they’re part of our ecosystem to build AI infrastructure for the world,” Huang said.