The $100B Deal That Never Was: Nvidia-OpenAI Rift Exposed

$100 billion. That's the investment figure Nvidia and OpenAI trumpeted in September 2025, promising to finalize details "in the coming weeks." Five months later, there's no signed contract, Nvidia's CEO now calls it "never a commitment," and OpenAI has been quietly shopping for alternatives.

When Performance Doesn't Match the Hype

The cracks started showing in OpenAI's Codex, their AI code-generation tool. According to Reuters, citing eight sources familiar with the matter, some Nvidia chips were underperforming in inference tasks—the process where trained AI models generate responses to user queries. OpenAI staff reportedly blamed the performance limitations on Nvidia's GPU-based hardware.

This isn't just a technical hiccup. Inference is where the money is made in AI. While training models requires massive computational power in bursts, inference happens millions of times daily as users interact with AI systems. If your chips can't handle inference efficiently, you're bottlenecking the entire revenue stream.

Damage Control in Real Time

When Reuters broke the story, Nvidia's stock price took a nosedive. The response was swift and telling. OpenAI CEO Sam Altman rushed to X with damage control: "We love working with NVIDIA and they make the best AI chips in the world. We hope to be a gigantic customer for a very long time."

But public reassurances can't paper over a fundamental shift. If OpenAI—Nvidia's poster child customer—is actively seeking alternatives, what does that say about the supposed invincibility of Nvidia's technology?

The Monopoly Mirage

For years, Nvidia has enjoyed near-monopolistic control over AI compute. Their CUDA ecosystem became the de facto standard, making it extremely difficult for competitors to gain traction. But monopolies built on technical superiority are inherently fragile—they last only as long as the technology gap remains unbridgeable.

OpenAI's chip shopping expedition signals that gap is narrowing. Companies like AMD, Intel, and even custom chip designers are making inroads. The AI chip market, worth $71 billion in 2025, is becoming genuinely competitive for the first time.

Beyond the Headlines

This story reveals something deeper about the AI industry's maturation. Early adopters like OpenAI are no longer content to accept whatever chips are available—they're demanding solutions tailored to their specific workloads. The one-size-fits-all approach that worked during AI's experimental phase is giving way to specialized requirements.

For investors, this represents both risk and opportunity. Nvidia's stock premium was built on the assumption of sustained dominance. That assumption is now being tested. Meanwhile, alternative chip makers and AI infrastructure companies could see increased interest as customers diversify their supply chains.