Nvidia shares are down after report that its OpenAI investment stalled | Hacker News Reader

Nvidia shares are down after report that its OpenAI investment stalled

cnbc.com

158 pointsgreatgib63 comments

You would think the effect was the opposite. I think this is worse for OpenAI.

So far, the circular financing from Nvidia has been peanuts for the company. It's roughly equal to giving 5% discount on hardware, not a big deal when the profit margin is 70%. Trying to prop up new neoclouds and competition is a good idea.

As I understand it, the OpenAI investment was much bigger effective discount but still safe because Nvidia invests gradually in installments only when OpenAI invests in data centers: tit for tat. Maybe OpenAI wanted to get the money now and invest it later, as they seem to be running out of cash.

> You would think the effect was the opposite. I think this is worse for OpenAI.

How do we know it wasn't? OpenAI isn't a publicly traded company, and I guess no one who dares writing anything here actually knows how the numbers look on the inside, so for what we know, it could very well have been worse for OpenAI than Nvidia.

You can make a good guess, though - OpenAI had a significant lead, its moat was being a generation or 2 ahead of the competition, and as of the end of 2025, OpenAI, Google, xAI, and Anthropic are pretty much neck and neck. Grok and Gemini are likely to be the top 2 within the next couple months, and the Chinese open models are hot on their heels.

OpenAI is going to be competing for third or fourth place with Anthropic unless one of them pulls off a big capabilities or efficiency leap while remaining believably as good as the other top models. Google and xAI have advantages that the others don't, and are capitalizing on them like crazy. It remains to be seen whether xAI can compete with the Google hardware advantage, but they have economies of scale, differences in mission, and Elon's billions on their side, so it's turning out to be a very interesting race.

Sama could also finagle a funding rabbit or strategic partnership out of his hat and also have the next top tier model, amazing everyone again and keeping a plausible "best in class" lead for a while; OpenAI would have to be down for at least a year before I counted it out completely. It's not looking very pretty for them right now, though.

No one believes Grok will be top 2 in a couple months. OpenAI and Gemini, in one of the two orderings, will continue to be far ahead of Grok in "the next couple of months". I encourage you to bookmark your claim here and return in 2 months to take stock in your ability to predict/bluff.

How do you know which two models are 'top 2' and how do you expect the parent commenter to know which are top 2 when he comes back to this comment and verify his prediction?

Genuine question.

Grok even if it were technically superior is hampered by it being owned and run by a mercurial racist narcist who in drug infused mania keeps accidentally turning it into Mecha-Hitler in attempts to make it fit his political views or turning it into a generator of child porn. No one in their right mind wants to have their product associated with that kind of liability. Who wants an ai agent that starts spewing great replacement theory at their customers?

The open source models are showcasing a lot of cool research ideas that will undoubtedly end up in future frontier models from OpenAI and others. We're at a point where the big proprietary AI firms barely do any foundational research anymore, they're purely about incremental improvement. All the proven substantial progress recently has been coming from the open models side.

I agree that DeepSeek and others have been doing most of the published research for future frontier models.

But I’m not sure we can say they the big US companies aren’t doing foundational research anymore. I suspect a lot of it is just kept unpublished as a result of the intense competitive pressure, which is disappointing.

Even if OpenAI gets “better” than Google, it’s still a sharecropper on other people’s infrastructure and depending on more expensive Nvidia chips while Google has a real business that throws off 10s of billions a year in profit, it’s own infrastructure, its own TPUs, and actual customers with both search and related and GCP.

What I don't understand is why Gemini is not #1, other than that Google has no economic reason to have the same fire under its ass to be #1 as Anthropic and OpenAI. Or maybe they are correctly assessing that getting to good enough and out-building infrastructure is more valuable; they do have their TPUs as bets on their future and their search monopoly today to print nearly endless free cash flow. Perhaps Gemini is advancing at exactly the right rate for them.

I guess there is one thing that Gemini is objectively better at than either, which is long context, and it does seem to be by an order of magnitude. What boggles my mind is why Gemini is still not as good as the open weight frontier models yet. If they got just to parity with that along with their existing long context and strong token pricing, they'd be able to take over the coding market. Are they just biding their time to make their move? Hard to discern.

My best guess is that Nvidia is unhappy with how OpenAI is fishing for compute with its competitors (Jensen had some opinions on the AMD-OpenAI deal when it was announced). If this actually becomes a feasible reality, it gives OpenAI (and co) negotiating power - which is bad for Nvidia

Nvidia might have wanted more exclusivity/attachment. And OpenAI still seems to have no problem raising money. So maybe there was just a commitment mismatch

Pure speculation though

> the circular financing from Nvidia has been peanuts for the company.

Enron thought the same thing. Until they had a closer look at what their middle managers were actually doing to the books.

https://news.ycombinator.com/item?id=46865317

>It's roughly equal to giving 5% discount on hardware, not a big deal when the profit margin is 70%.

using your numbers, Nvidia didn't drop 70%, it's more on the order of the 5% so at least from that angle, the news narrative holds together superficially.

the hit to microsoft the other day was pretty interesting

I saw reports attributing it to a miss on earnings from Azure but they were off by 0.4% on 39% growth. That's 39% instead of 39.4%. And the company stock dropped 10%. This is all of Microsoft - 10% down (!).

It has to tell you there are a LOT of people primed to sell in a hurry on bad news. The "bubble" talk subsided a lot after nVidia smashed earnings last quarter, but largely overlooked how much their whole situation is based on pent up demand. It completely masks the fundamentals.

I still feel like we're sitting on a volcano and seeing puffs of smoke and feeling earth tremors.

The intense race to dump the risk on the public and cash out (OpenAI ipo, Musk folding xAI into SpaceX for that IPO) is very telling.

The same thing that YC does…

https://medium.com/@Arakunrin/the-post-ipo-performance-of-y-...

You generally want to IPO (and fundraise in general) at the most favorable terms possible — not when there are market headwinds.

Not if you see the IPO as your only remaining exit strategy for a juggling act that is threatening to rain down on your head when it collapses

I always wanted to crunch the numbers but never got around to it, so I'm glad someone actually went and did it. YC company IPOs always smelled like pump-and-dump than a true liquidity/fundraising event, and if those numbers are correct, I was right. Or to put it another way, if someone asks "should I buy IPO shares in a YC company", the answer is "no".

Absolutely. What we’re seeing is a familiar pattern in tech: when things go well, the rewards are private, but when the risks build up—whether financial, regulatory, or technical—they get socialized onto the public. IPOs become a way to offload responsibility, recapitalize, and let early stakeholders cash out while passing long-term uncertainties to a broader set of investors and the market itself.

As I understand it, it was in part about their Azure miss more about capital expenditure and market anxiety around their OpenAI investment ROI.

Also a portion of their Azure spend was some clever accounting they did if memory serves me

https://www.geekwire.com/2026/microsofts-historic-plunge-why...

I think it would be healthy for everyone if the hype around this stuff would die down a bit. There's too much pressure to invest in hardware and too much uncertainty around the business case. I am excited to see what can be built but I hope a bunch of people don't have to get wiped out financially along the way.

Possibly good for Nvidia as I have doubts OpenAI will be able to pay their massive IOUs in a timely fashion, if ever.

Did Oracle spin off Cerner yet?

What do you mean by spin off?

I thought this was already revised? Jensen Huang said they’ll be investing more than ever:

> Nvidia is likely set to make its “largest ever investment” in ChatGPT firm OpenAI, despite reports that the deal may be under threat in recent weeks. The chip giant’s CEO, Jensen Huang, didn’t say exactly how big the investment would be, but said it would be “nothing like” the $100 billion figure mentioned in the September partnership agreement.

https://www.pcmag.com/news/nvidia-ceo-well-make-our-largest-...

The “largest ever investment” remark felt less like confidence and more like a “nothing to see here, move along” PR reflex.

How long after the collapse of OpenAI will the DDR situation come back to normal.

hopefully never, so we just have to run cheap screens connected to AI servers /j

Down to levels as low as where they were a few days ago, lol

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