TJ Walker (YouTube video) discusses a reported Nvidia commitment to invest $100 billion in OpenAI, including plans to sell ~4–5 million Nvidia AI chips to OpenAI, concurrent fundraising for OpenAI led by SoftBank that could add $40 billion, and reported valuations of OpenAI at ~$300 billion (primary) with secondary sales implying ~$500 billion. Walker highlights that tech giants plan roughly $325 billion in AI data-center spending this year, frames Nvidia’s move as part of a supplier-becomes-backer trend, and warns that such cross-ownership and influence could stifle competition and innovation—arguing for regulatory scrutiny of big tech. He discloses not owning Nvidia shares directly but holding them via index funds and mentions he pays $20/month for ChatGPT.
Nvidia's $100 billion bet on OpenAI. According to the New York Times, Nvidia will invest $100 billion in OpenAI, blurring the line between supplier and backer as Jensen Huang promises the largest data center build out in history. The plan includes selling 4 to 5 million Nvidia AI chips into OpenAI's facilities while OpenAI pursues separate fundraising led by SoftBank the that could add 40 billion and value the company at $300 billion with secondary sales implying 500 billion. Tech giants plan more than $325 billion in AI data center supporting this year alone. Supporters call it a logical flywheel. Nvidia finances capacity that consumes Nvidia chips. Skeptics warn of circular demand and balance sheet risk if AI adoption lags for now, supplier investor integration is the business model of the moment and Nvidia sits at the center. What's the real message here? Nvidia is investing $100 billion into OpenAI. It might work out. The problem is there is increasing consolidation among the largest tech companies in the world, which should stifle innovation because if someone at intel, someone else Nvidia is invested and says, hey, we can come up with a new chip that's 80% less expensive and runs faster than Nvidia's chip, someone in the back of the room is going to raise their hand and say, you know, one of our backers won't like that. Oh yeah, we better not do that. That is what is troubling. And that's why we do need some regulation not controlled by the federal government, but some regulation of big tech companies so they don't continue to get bigger and bigger because we're not that far away from the entire economy or 95% of the economy being controlled by just five companies. Let's, let's dig a little deeper here, okay? Because I'm not anti. I'm not, certainly not anti Nvidia. And full disclosure, I don't personally own shares of Nvidia, but through index funds of mine, it's a pretty significant portion of my portfolio. And again, I'm not here to give you stock advice and I'm not telling you buy or sell Nvidia. I do think that it may be smart for Nvidia to have its finger in all these different pies. A finger in the intel pie, a finger in the OpenAI pie. Keep your own customers happy and alive and thriving. But it is troubling given that virtually all of the growth in the S&P 500, it now comes down to what 10 companies do with Nvidia being the top of the list. And as they just get bigger and bigger and have more pieces of more companies, it does make it harder to compete. I mean, part of the free market capitalist system is there should be robust competition. If one company owns a piece of every other company in the industry, how do you compete with that? Because it's now a conflict of interest. Yet if I'm at Intel and I say, if I'm an engineer and I've say, hey, I got an idea, got a new design to come up with a chip 10 times faster, 10 times cheaper than Nvidia's chip, someone else is going to say, well, you know, they own 5% of us now. They're not going to like that. Maybe ixnay on the competing with Nvidia chips. That's the problem. And Scott Galloway, the famed NYU professor, brought this up and gave that example. I want to give him a hat tip for that, but I think he's right on the money there. There is a problem with really, really big companies that dominate industries to the point that a Nvidia does, or a Google or a Meta does, continuing to take slices of other companies even if they don't acquire them. That ownership presence in the boardroom, even if they're not on the board, it's just added pressure to the executives thing. Maybe we shouldn't really compete with one of our patrons. And this is something that's gotta be looked at again. Let's look at a few more of the facts on this case. Nvidia to invest $100 billion. 5 million chips tied directly to OpenAI. OpenAI is currently raising 40 billion from SoftBank. They're the lead investor. Their valuation is going up to about half a trillion dollars, which is a lot for a company that doesn't technically make any profit. The AI infrastructure spending is going to be $325 billion across all the major companies this year. So the spending continues, but the stakes are very high because whoever can be dominant and really training AI and getting their capacity up could control the world. And that's why you're seeing such a gold rush so far. We don't see a lot of profit directly from AI other than companies selling AI services. But you could arguably say that's that has happened in and other technology revolutions like the, like the Internet and the PC revolution. It doesn't show up right away. I can tell you I use AI a great deal every single day. I use ChatGPT. Full disclosure, I'm one of their customers. I only pay $20 a month, and I own no stake in the company whatsoever. So it's. It is huge. It's getting huge. It's getting bigger. And I think before we get so excited about all government regulation bad, we do need to have some regulatory scrutiny when the largest companies in the world are either buying up or barring significant pieces of others in their sector, because it just could lead us down the wrong path in many ways.
