Nvidia CEO Is Surprised by AMD’s OpenAI Equity Move: What’s in Store for NVDA Stock?

Core Insights - Nvidia CEO Jensen Huang expressed surprise at AMD's decision to grant OpenAI up to a 10% ownership stake as part of a multibillion-dollar partnership, calling it "imaginative" and "unique" [1] - The AMD-OpenAI deal has led to a significant rally in AMD's stock, while Nvidia shares saw a modest increase, indicating investor interest in the competitive dynamics of the AI chip market [1][2] AMD-OpenAI Partnership - The agreement between AMD and OpenAI involves OpenAI purchasing up to 6 gigawatts of AMD's chips, including the upcoming MI450 series, over several years [4] - In return, OpenAI will receive warrants for up to 160 million AMD shares, potentially giving it around 10% ownership if fully exercised [4] Competitive Landscape - The AMD-OpenAI agreement is seen as a direct challenge to Nvidia's long-standing leadership in the AI semiconductor sector [5] - Huang highlighted the differences between AMD's agreement and Nvidia's collaboration with OpenAI, noting Nvidia's plan to invest up to $100 billion in OpenAI over the next decade [5] - Nvidia's relationship with OpenAI allows it to sell directly to the company, which may need to raise significant funds to meet its commitments [5] Strategic Positioning - AMD's bold move aims to close the gap with Nvidia, but evidence suggests that Nvidia's deep ecosystem investments and ongoing technology leadership will maintain its position at the forefront of the AI revolution [6]