Nvidia and OpenAI Fuel AI Boom with Interconnected Funding Loop

Nvidia and OpenAI have created a financial loop that raises questions about the true demand for AI technology. The cycle begins with Nvidia, which planned a $100 billion investment in OpenAI in September 2025 to deploy 10 gigawatts of Nvidia systems. That deal never materialized, but Nvidia later invested $30 billion in OpenAI as part of an $110 billion funding round in February 2026. Nvidia CEO Jensen Huang later suggested the full $100 billion investment was unlikely.

OpenAI, in turn, has committed to massive spending on cloud computing. It agreed to purchase $300 billion worth of computing power from Oracle over five years starting in 2027 and has contracts with CoreWeave totaling $22.4 billion. These cloud providers then stock their data centers with Nvidia chips, sending much of the money back to Nvidia.

The ties between Nvidia and CoreWeave run even deeper. Nvidia invested an additional $2 billion in CoreWeave stock in January 2026, increasing its stake to about 11%. A 2025 agreement worth at least $6.3 billion also obligates Nvidia to buy any unsold cloud capacity from CoreWeave through April 2032.

While these deals do not necessarily indicate fake demand, they make it challenging for investors to distinguish between external spending and money circulating among closely linked partners. If funding for any part of the loop tightens, the strain could affect the entire chain. Nvidia shares closed at $233.95 on October 2, near their record high, reflecting strong market confidence in the AI sector.