NVIDIA’s Strategic Evolution: A Summary

$NVIDIA(NVDA.US) NVIDIA is rapidly shifting its focus from traditional graphics chips to becoming a cornerstone of the global AI ecosystem.

Key Moves:

• OpenAI Collaboration:NVIDIA has committed up to $100 billion to OpenAI for building a massive AI data center powered by millions of its GPUs, supporting the deployment of advanced AI models. Initial funding starts at $10 billion, with further investments linked to GPU usage and project milestones.
• ONO Alliance Formation:Together with OpenAI and Oracle, NVIDIA has created a mutually dependent alliance: NVIDIA backs OpenAI, OpenAI uses Oracle’s cloud, and Oracle purchases NVIDIA GPUs. While this setup accelerates growth, it also brings financial risks if any partner underperforms.
• Intel Partnership:NVIDIA invested $5 billion for a minority stake in Intel, aiming to jointly develop custom data center and PC solutions. These products will integrate Intel CPUs and NVIDIA GPUs, expanding AI capabilities to broader computing markets.
• Business Model Transformation:Moving beyond hardware sales, NVIDIA is focusing on long-term investments and contracts, aiming for predictable, recurring revenue and greater influence over the global computing landscape—much like a central bank’s role in monetary policy.