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Is OpenAI facing bankruptcy in 2027 without new Nvidia funding?
The Investment Reality: Jensen Huang Clarifies the $100 Billion Rumor
Nvidia CEO Jensen Huang has explicitly corrected market speculation regarding a massive financial commitment to OpenAI. Speaking in Taipei on February 1, 2026, Huang stated that Nvidia never pledged $100 billion in a single financing round. He clarified that OpenAI invited Nvidia to invest up to that amount, a critical distinction that separates a firm obligation from a solicitation.
While the $100 billion figure garnered headlines in late 2025, the actual capital injection will likely settle between $10 billion and $30 billion. This adjustment realigns expectations with standard corporate investment strategies, even within the high-valuation AI sector.
The Mechanics of Circular Investment
You should understand the economic structure driving these deals. The arrangement between Nvidia and OpenAI operates as a circular transaction. Nvidia invests capital into OpenAI. OpenAI, in turn, uses that capital to purchase Nvidia’s specialized AI chips and secure data center infrastructure.
This cycle artificially boosts revenue figures for both entities. Nvidia records increased hardware sales, while OpenAI secures necessary capitalization. However, this dependency raises concerns about organic market demand versus funded consumption. Critics note that such circularity can inflate stock valuations without necessarily reflecting sustainable, external revenue growth.
OpenAI’s Capital Burn and Solvency Risks
The urgency behind these negotiations stems from OpenAI’s accelerating operational costs. Financial projections indicate the company will incur a loss of approximately $14 billion in 2026. This burn rate is driven by the immense computational power required to train and run next-generation models.
The timeline for solvency is tight. Without significant new capital infusion from partners like Nvidia, Microsoft, Amazon, or Softbank, OpenAI risks depleting its cash reserves by 2027. CEO Sam Altman is currently negotiating a funding round targeting $60 billion to $100 billion total from this consortium to bridge the gap.
Strategic Implications
For investors and industry observers, three key takeaways emerge from Huang’s clarification:
- Valuation vs. Cash Flow: The “invitation” to invest $100 billion highlights OpenAI’s capital intensity rather than Nvidia’s willingness to deploy that much cash immediately.
- Market Stability: Huang’s denial of a rift with OpenAI stabilizes partnership perceptions, ensuring technical collaboration continues despite lower investment totals.
- Hardware Dominance: Regardless of the final investment sum ($10B or $30B), the deal ensures Nvidia remains the exclusive infrastructure provider for OpenAI’s future data centers.