What’s going on?
On 22 September 2025, NVIDIA and OpenAI announced a letter of intent for a strategic partnership to deploy at least 10 gigawatts of NVIDIA systems to support OpenAI’s next-generation AI infrastructure. NVIDIA pledged to invest up to $100 billion progressively, as each gigawatt of infrastructure is deployed. The first phase is expected to go live in the second half of 2026, powered by the NVIDIA Vera Rubin platform.
What is a letter of intent?
A letter of intent (LOI) is a preliminary, typically non-binding document outlining the key terms of a potential transaction. It serves as a framework for negotiating a final agreement. While most provisions are non-binding, clauses such as confidentiality and exclusivity are often enforceable. LOIs may also be referred to as memoranda of understanding, term sheets, or protocols, and they can impose certain legal obligations even before a formal contract is signed.
What is a strategic partnership?
Strategic partnerships are collaborative arrangements between organizations aiming to achieve shared goals—such as innovation, market expansion, or infrastructure development. These alliances often involve resource pooling, technology sharing, and joint ventures, but they also require careful legal structuring to address governance, liability, and compliance.
The Triangular Partnership: NVIDIA, OpenAI, and Oracle
This alliance has been referred to as the AI gold rush. Here’s how the structure unfolds:
- NVIDIA will invest up to $100 billion in OpenAI.
- OpenAI has signed a $300 billion agreement with Oracle to lease compute capacity over five years.
- Oracle is investing $40 billion to purchase 400,000 NVIDIA GB200 chips for its data centers.
This circular flow of capital consists of NVIDIA investing in OpenAI which uses those funds to buy NVIDIA hardware hosted by Oracle.
What about antitrust?
Legal experts have flagged potential antitrust concerns. NVIDIA already dominates the AI chip market, and its deep financial ties with OpenAI could lead to preferential treatment, such as better pricing or earlier access to hardware. This may disadvantage smaller AI labs and competitors. The U.S. Department of Justice and Federal Trade Commission are reportedly monitoring the situation, especially given the scale and structure of the deal.
Conclusion
The legal implications of this triangular alliance will unfold over time. It represents a significant shift in how AI infrastructure is financed and deployed, and may set precedents for future tech partnerships.
Note: This text reflects the personal opinion of the author and does not constitute legal advice.
