Is Nvidia's Deal With OpenAI a Game Changer?
A number of companies have made commitments to invest in domestic infrastructure over the next several years. Chief among these initiatives is a joint venture among Oracle, SoftBank, and OpenAI. Known as Stargate, this consortium of technology leaders plans to invest $500 billion into artificial intelligence (AI) infrastructure in the U.S.
Just last week, investors finally got an update on how Stargate is progressing. In perhaps a shock to absolutely no one, semiconductor powerhouse Nvidia (NASDAQ: NVDA) is involved with a new data center for OpenAI.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »
Let's dig into this deal and assess why it could be a game changer for Nvidia.
How are Nvidia and OpenAI working together?
As a refresher, OpenAI burst onto the AI scene a few years ago following a multibillion-dollar investment from Microsoft. While OpenAI's services, chief among them ChatGPT, have become heavily integrated throughout Microsoft's ecosystem, both companies have been seeking opportunities to branch out over the last year or so.
For OpenAI, the company has reached a point whereby striking partnerships with other technology companies is essential -- hence the creation of Stargate.
The reason for this is that as demand for ChatGPT grows, so does the need for compute power (i.e., more data center infrastructure). However, Microsoft simply cannot be the sole bridge to finance OpenAI's needs.
Per recent reports, Oracle is planning to purchase an estimated 400,000 graphics processing units (GPU) from Nvidia for OpenAI's new data center in Texas. Of note, the GPUs are Nvidia's new Blackwell architecture and could cost Oracle up to $40 billion.
Oracle will subsequently be leasing these chips to OpenAI as part of the deal structure, adding even more tailwinds to its fast-growing infrastructure-as-a-service (IaaS) division.
Why is this deal important?
I see two primary reasons why this deal is a game changer for Nvidia.
First, global management consulting firm McKinsey & Company recently published a report in which it estimates nearly $7 trillion will be spent on AI infrastructure over the next five years. Within this grand total, McKinsey believes that hardware providers will be the biggest beneficiaries of rising AI capital expenditure (capex).
Even though Stargate is still in its infancy, there are signs that hardware suppliers such as Nvidia are already benefiting from increased AI infrastructure budgets. Reports suggest that OpenAI is considering building more data centers beyond Texas. Given Nvidia's selection to lead this initial buildout, I'm optimistic the company could continue winning more contracts from the Stargate project -- hence, this could be the beginning of a long-term relationship between OpenAI and Nvidia.
On top of that, it was reported earlier this year that OpenAI was collaborating with Taiwan Semiconductor Manufacturing to develop its own custom chipsets. While OpenAI may indeed eventually pursue custom silicon, it appears for now that the company's compute power relies heavily on data centers outfitted with Nvidia's GPUs.
To me, this signals that demand for Blackwell continues to remain robust. Moreover, Nvidia's selection as a primary chip supplier for one of Stargate's initial projects underscores just how critical the company's hardware is for ongoing AI development.
Should you buy Nvidia stock right now?
For the first time in almost three years, Nvidia stock has actually taken a breather -- and a prolonged one at that.
NVDA PE Ratio (Forward) data by YCharts
Investors have been selling Nvidia stock throughout most of 2025, thanks in large part to uncertainty around new tariff policies and how they may impact Nvidia's ability to conduct business in China.
Nevertheless, the company's forward price to earnings (P/E) multiple of 32.6 shows some clear valuation compression in the red-hot chip stock. I see the deal with OpenAI as a potential proxy for what's to come for Nvidia as Stargate and other AI infrastructure deals come to fruition. To me, the company's long-run prospects look as strong as ever -- despite some headwinds in key Asian markets for now.
Investors with a long-run time horizon may want to consider scooping up shares of Nvidia right now, as the stock could witness a sharp rebound if it continues to win over more high-profile deals with AI's biggest developers.
Should you invest $1,000 in Nvidia right now?
Before you buy stock in Nvidia, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $638,985!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $853,108!*
Now, it's worth noting Stock Advisor 's total average return is978% — a market-crushing outperformance compared to171%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of May 19, 2025
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CTV News
19 minutes ago
- CTV News
U.S. small businesses struggle under Trump's tariff whiplash: ‘I'm so angry that my own government has done this to me'
U.S. President Donald Trump speaks to reporters in the rain after arriving on Air Force One at Joint Base Andrews, Md., Friday, May 30, 2025. (AP Photo/Julia Demaree Nikhinson) For some small businesses, the last week brought even more twists and turns to the past two months of President Donald Trump's chaotic tariffs. The situation was already confusing, with stops and starts of tariffs at different levels. Then on Wednesday, a US court said Trump overstepped his authority in imposing most of those import levies – only for an appeals court on Thursday to pause the previous court's ruling. The confusion has made it challenging for some small companies to plan, business owners told CNN. In certain cases, they have had to consider changing their product strategy, looking into shifting their supply chains, reducing staff hours or delaying products. 'My fear is, if this continues, there's going to be like the mass extinction of small businesses,' Julie Robbins, CEO of Ohio-based guitar pedal maker EarthQuaker Devices, told CNN. Trump announced blanket tariffs across the globe on April 2, and since then, his plans have changed on a regular basis. In early April, he issued a 90-day pause on reciprocal tariffs almost everywhere except China. Then, after ratcheting up total tariffs on Chinese imports to 145 per cent, he declared smartphones and certain other electronics would be exempt from the reciprocal tariffs. The US and China agreed in May to roll back reciprocal tariffs for 90 days. And in late May, he threatened smartphone makers like Apple with 25 per cent tariffs if they don't make their phones in the US. He also agreed to push back levies on imports from the European Union until July 9. Those are only some of his changes, which can come at any time of day via the White House, social media posts or other avenues. The whiplash has been hard for companies to keep up with. Even major brands like apparel giant Gap are feeling the impact of tariffs, but small companies with far fewer resources are in an even tougher spot. The National Federation of Independent Business Small Business Optimism Index fell by 1.6 points in April, dipping below the 51-year average for the second consecutive month. The organization's chief economist, Bill Dunkelberg, cited uncertainty as a 'major impediment' for small business owners in a press release. 'It's the sort of more smaller, kind of more niche… brands that are going to really, really get hit by this,' Jack Leathem, an analyst at market research firm Canalys, told CNN in April. Some small business owners have had to make difficult decisions as they've grappled with the impact of tariffs. EveAnna Manley, whose company Manley Labs makes high-end electronics for recording studios, has had to cut her employees' hours by 25 per cent. The reciprocal tariffs that China imposed on the US have been particularly challenging, she says, since China has become a major market for her business. Manley says it took 'decades' for her to 'get the best Chinese importers.' Overall, Manley Labs' sales are down more than 19 per cent compared to last year, she told CNN, which has frozen the company's product development efforts. 'It's just a freaking mess right now,' she said in late May, before this past week's court rulings on Trump's tariffs. 'And I'm so angry that my own government has done this to me.' The best thing small businesses can do right now is to be flexible and diversify their sourcing and procurement strategies, says Tala Akhavan, chief operating officer of Pietra, a platform that helps brands with sourcing, production and logistics among other services. That's what Intuition Robotics, which makes a home robot designed to be a companion for older adults, is doing, according to chief strategy officer Assaf Gad. The company also makes money off its digital subscription accounts, according to Gad, giving it the flexibility to look into a 'plan B' outside of China for producing the company's hardware. Sudden changes in tariff policies haven't really impacted the company's decisions because it's planning for the next nine to 12 months rather than the short term, he said in mid-May. Trump's tariffs have encouraged Gad to think about expanding Intuition Robotics into international markets. 'Maybe this is also a good time to say, 'Let's not put all the eggs in one basket,'' he said, 'and, you know, start looking on other kind of territories that will reduce the risk for us going forward.' But for some companies, finding a plan B isn't so easy. That's the case for Sarah O'Leary, CEO of Willow, which makes wearable breast pumps and accessories. As a medical device company, Willow can't simply just move its manufacturing, O'Leary told CNN. The company had to pause exporting one product it produces in China for postpartum recovery at one point because it became too expensive. The ruling on Wednesday aiming to block many tariffs brought some relief, O'Leary said in an emailed statement on Thursday evening. But she acknowledged that there's still 'so much uncertainty,' adding that 'the chaos will persist.' Any tariffs, even low ones, would be difficult for a small company like hers to absorb, she said in mid-May. 'We don't build our products with that much margin,' she said. 'And so, unfortunately, we are in a position where we have to evaluate what we can do to survive in those contexts.' Lisa Eadicicco, CNN
Globe and Mail
39 minutes ago
- Globe and Mail
The Best Technology ETF to Invest $2,000 in Right Now
Succeeding in the stock market doesn't require one to pick the best individual businesses for their portfolio. Thousands of exchange-traded funds (ETFs) exist that can help automate the investing process, providing exposure to various themes or industries that you might be bullish on. Perhaps no trend has had a greater impact on the economy and markets in the past couple of decades than technology. More recently, this is showing up in the ongoing artificial intelligence (AI) boom. Luckily, investors don't have to look far to bet on this tailwind. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » Here's the best tech ETF to buy with $2,000 right now. Betting on technology looks like a lucrative move It seems that technology, the internet, and AI will only become more important. From an investment perspective, it makes sense to want more of your capital in the right place. That's why the Invesco QQQ Trust (NASDAQ: QQQ) is the top technology ETF to invest $2,000 in. It tracks the performance of the largest 100 non-financial companies that trade on the Nasdaq stock exchange. As of this writing, this fund had $324 billion in assets under management, demonstrating its impressive scale. This ETF might have 100 different stocks in it, but the top 10 account for a whopping 49.8% of the total. Unsurprisingly, the " Magnificent Seven" are very important. Investors considering owning the Invesco QQQ Trust must be bullish on various tech-driven trends. Companies in the ETF are benefiting from e-commerce, digital advertising, digital payments, streaming entertainment, electric vehicles, cloud computing, and of course, AI. Stellar performance at a low cost The beauty of owning this ETF is that there is no need to try to pick single stocks that could be the big winners of tomorrow. The Invesco QQQ Trust ensures you'll have exposure to the tech companies that become successful in their respective market niches. Viewed this way, it's a low-maintenance strategy to allocate capital. In the past decade, the Invesco QQQ Trust has generated a total return of 404% (as of May 27). This means a $2,000 investment made in May 2015 would be worth $10,000 today, trouncing the performance of the broader S&P 500 index. Understanding the cost structure is critical. The last thing investors want to do is buy an ETF that charges an arm and a leg for subpar returns. This isn't the case here. Out of a $2,000 investment, just $4 goes to paying the 0.2% expense ratio on an annual basis. You get to keep more of your money. What will the future hold? Investors have heard the saying that past results won't guarantee future returns. This is the right way to think about the Invesco QQQ Trust over the next decade and beyond. While outsize returns are possible, it's best to keep expectations in check. The optimistic view is that technology businesses generally have done well over the long term, due to their disruptive products and services and cultures of innovation. And there's no reason to think this will change. That bodes well for return prospects. But it also pays to have the right mindset. Don't forget that volatility is the name of the game, especially with some of the companies that are included in the Invesco QQQ Trust. Investor sentiment can shift on a dime. That's why it's a good idea to think about the next 10 years and beyond with this investment. Those who are patient may be rewarded. Should you invest $1,000 in Invesco QQQ Trust right now? Before you buy stock in Invesco QQQ Trust, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Invesco QQQ Trust wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor 's total average return is979% — a market-crushing outperformance compared to171%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of May 19, 2025
Globe and Mail
44 minutes ago
- Globe and Mail
ZA Miner Launches An AI-Driven Mining Protocol Ensuring Users Earn the Highest Crypto Rewards
London, United Kingdom, June 01, 2025 (GLOBE NEWSWIRE) -- In 2025, investors are opting into AI-driven cloud mining sites to enjoy the significantly high returns they offer. Cloud mining platforms like ZA Miner utilize automated crypto mining to ensure high yield. With the global crypto market gradually growing, crypto investors are progressively looking for efficient, compliant, and secure investment opportunities. The most recent hot news highlights ZA Miner as the top choice in the crypto mining space, leading with AI mining algorithms and the highest profitability. Let's dive in and review ZA Miner's key advantages, unrivalled contracts. Start today to figure out your professional investment strategy! Explore Exceptional Crypto Earning Opportunities ZA Miner's exceptional passive income generation sets it apart, allowing crypto investors to earn up to $23,803.20 and more daily. Additionally, the platform rewards contract purchase of up to $30,000.00 immediately after an investor's purchase. With ZA Miner, the journey to financial stability is seamless and hands-free. Its users can enjoy contract referral bonuses of up to $1,888 or 7% + 1% direct and second-level referral commissions. If you are looking to acquire consistent and significant passive income minus the constant hassle or complex infrastructure, ZA Miner offers the best investment plans. Built for Security, Designed for Sustainability In the crypto mining ecosystem, trust, credibility, and security are essential. ZA Miner's core mission is safety and high profits, committing to transparency and legality to ensure users' investments are protected. The platform's remote mining farms use green energy to power their AI-optimized infrastructure, making the process carbon-neutral. Additionally, clean energy helps ensure high yields, allowing every investor to reap outstanding benefits. ZA Miner employs We use the latest ASIC miners, GPU equipment, creating an extensive experience in cloud mining operations and competitive mining technology. Backed by strong security measures like McAfee® SECURE protection and Cloudflare® SECURE protection, the platform provides top-notch security. ZA Miner: Redefining Cloud Mining with Powerful Advantages Maximized profitability: AI-automated algorithms constantly evaluate mining pools, switching to the most profitable one, ensuring the highest possible way to make money. Advanced mining equipment: The platform utilizes cutting-edge infrastructure hired from leading machine manufacturers like Antminer. Bitmain and Giant Energy Combination Miner. This ensures steady mining operations and efficient returns capacity ZA Miner VIP membership benefits. Investors can get up to $500,000 in benefits by acquiring the VIP club membership. Amazingly, there are 10 levels permitting users to upgrade. Compliant and accessible worldwide: ZA Miner was legally launched in Middlesex, United Kingdom, in 2020, fully under the UK government. In the last 5 years, the platform has gained more than 10 million real users globally. Intuitive user interface: ZA Miner's friendly UI allows easy navigation for every crypto investor. ZA Miner is a multi-crypto platform: it supports DOGE, BTC, ETH, USDC, USDT, BCH, LTC, XRP, and SOL for settlement. Sustainable passive income: ZA Miner contracts generate high profits every 24 hours, with guaranteed principal returns. High-yielding affiliate program: allows individuals to refer friends and get up to 7% in referral commissions. Join ZA Miner in Just 3 Easy Steps: Register today and receive a $100 sign-up bonus. Investors are only required to have an email address. Choose your preferred investment plan. After completing the registration process, users pick a mining contract that suits their budget and investment strategies. Here are some of ZA Miner's contracts: Start making money every 24 hours. Your selected plans automatically start instantly after the contract purchase. ZA Miner ensures fixed daily passive income hands-free. ZA Miner: Leading 2025 as the Trusted Name in Crypto Cloud Mining and Smart Investments ZA Miner cloud mining has not only been providing crypto investors with safe and reliable investment opportunities but also revolutionizing the space with AI and green energy. The platform is tailored to provide easily accessible investment solutions for a substantial boost and constant wealth accumulation. Join ZA Miner now and embrace life-changing opportunities in the crypto landscape. Start building your crypto wealth today! #crypto mining #cloud mining #Blockchain #Best earning platform #High profit platform Disclaimer: The information provided in this press release does not constitute an investment solicitation, nor does it constitute investment advice, financial advice, or trading recommendations. Cryptocurrency mining and staking involve risks and the possibility of losing funds. It is strongly recommended that you perform due diligence before investing or trading in cryptocurrencies and securities, including consulting a professional financial advisor.
