If OpenAI cannot come up with a convincing product, it will gradually be abandoned by the market.

If OpenAI fails to deliver compelling products, it will gradually be abandoned by the market.

Below are the progress and criticisms of the agreement between NVIDIA and OpenAI.

The agreement between NVIDIA and OpenAI is currently the most ambitious yet controversial "capital game" in the AI field.
According to the latest developments in 2025, this agreement can be summarized as "a $100 billion gamble, cyclical capital injection, and phased implementation":

1. Core Terms: $100 Billion "Investment in Lieu of Purchase"
   In September 2025, the two parties signed a landmark Letter of Intent (LOI):
   • Total Investment: NVIDIA plans to invest up to $100 billion in OpenAI.
   • Resource Exchange: The payment will not be made in a lump sum but will be disbursed in phases as computing facilities are deployed. Specifically, OpenAI plans to deploy at least 10 GW of AI data centers (enough to power a large city), and NVIDIA will increase its investment accordingly for every 1 GW deployed.
   • Hardware Binding: In return for the investment, OpenAI commits to exclusively using NVIDIA’s next-generation platforms (e.g., the Vera Rubin architecture to be launched in 2026) and millions of GPUs in these data centers.
2. "Left Hand to Right Hand" Cyclical Financing Model
   This is currently the most criticized aspect of the deal, even referred to by some analysts as the "AI bubble loop":
   • NVIDIA invests money in OpenAI.
   • OpenAI then uses this money (or indirectly pays through Oracle or Microsoft) to buy NVIDIA’s chips.
   • Result: NVIDIA’s financial reports show massive revenue and profits, while OpenAI gains much-needed hardware resources. This model has boosted valuations for both parties in the short term but masks the real risks of market demand.
3. Latest Twist: No Money Has Been Paid Yet
   Despite the grand announcement, as of mid-December 2025, the situation has subtly changed:
   • Agreement Not Finalized: NVIDIA CFO Colette Kress and CEO Jensen Huang publicly admitted on December 17 that this $100 billion agreement remains at the "intent stage" and has not been finalized.
   • "Not a Single Cent Paid": Huang personally confirmed that NVIDIA has not yet paid any money to OpenAI.
   • Increased Uncertainty: NVIDIA also stated in its latest regulatory filings that it cannot guarantee these investments will be completed as per the proposed terms. This indicates NVIDIA’s cautious stance after observing OpenAI’s "product strength" and "profitability transition progress."
4. Why Doesn’t NVIDIA Just Withdraw?
   NVIDIA’s current strategy is "deep binding but staying vigilant":
   • Moat Defense: Although OpenAI is exploring alternatives like AMD or Amazon, NVIDIA’s $100 billion investment framework significantly increases the cost for OpenAI to switch to competitors.
   • Ecosystem Control: As long as OpenAI continues to use NVIDIA’s systems to train future "superintelligence," NVIDIA remains the king of AI infrastructure.
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5. Conclusion
   NVIDIA has not abandoned OpenAI but has locked both parties onto the same chariot with this "$100 billion agreement." However, given OpenAI’s projected $5 billion loss in 2025 and slowing technological progress, NVIDIA has adopted a tactic of "big verbal support, cautious actual spending."
   If OpenAI fails to deliver more groundbreaking products by 2026 as planned, or if data center construction is delayed due to power and material shortages (as recent rumors from Oracle suggest), the execution of NVIDIA’s agreement is likely to be significantly scaled back.

While it appears to be a "left hand to right hand" move reminiscent of the dot-com bubble era, NVIDIA is actually very shrewd and won’t easily play the fool.