Chipmaker Nvidia (NVDA) says that its potential $100 billion investment in AI firm OpenAI (PC:OPAIQ) is still not finalized. Indeed, CFO Colette Kress explained at the UBS (UBS) Global Technology and AI Conference in Arizona that the two companies are still working out a final agreement. Nvidia first announced a letter of intent in September, which outlined a plan for OpenAI to use at least 10 gigawatts of Nvidia systems.
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For context, that amount of computing power is enough to power more than 8 million U.S. homes. Kress also noted that Nvidia currently has $500 billion in chip bookings through 2026, but the OpenAI chips are not included in that figure. She said that these additional orders would increase Nvidia’s total once the agreement is complete. Nvidia shares rose after her comments. It is also worth noting that Nvidia has been making similar deals with AI startups over the past year.
However, this has raised concerns on Wall Street about “circular deals,” in which Nvidia invests in companies that then buy Nvidia chips. In addition, Nvidia said that it plans to commit up to $10 billion to Anthropic (PC:ANTPQ), a major OpenAI competitor. According to Kress, that agreement could also increase the company’s $500 billion booking total. As a result, these moves show just how aggressively Nvidia is positioning itself at the center of the AI boom.
What Is a Good Price for NVDA?
Turning to Wall Street, analysts have a Strong Buy consensus rating on NVDA stock based on 39 Buys, one Hold, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average NVDA price target of $258.10 per share implies 42.1% upside potential.
