OpenAI and Nvidia in talks over “circular” AI investment

• DW reports that Nvidia is offering a total of $250 billion (€217 billion) in funding for OpenAI’s data-center project.
• Material suggests that the “circular” funding model, in practice, could involve participants in the AI ecosystem providing financial support for each other, but without any direct exchange of money.
• Forbes writes that the ongoing talks between OpenAI and Anthropic, in which the Chinese AI-lab participants are also involved, could be intended to form a chain of deals in which the parties pass on data to each other.

According to DW, Nvidia would provide OpenAI with $250 billion (€217 billion) for the data-center project. Deutsche Welle cites two sources close to the “circular” financing model.

Based on DW, insiders say that the AI ecosystem’s participants may provide each other with innovations, infrastructure, model development, and companies’ implementation of the resulting solutions. In practice, the “circular” funding described by DW means that AI, in the form of the “puzzle,” is passed from one participant to another through the participants’ mutual interest.

DW also says that the “circular” funding model works like this: a company invests in the production of chips or provides chips, and then the company’s chips are used by another company. In particular, ChatGPT’s success after its launch in 2022 led to a surge in investment in Microsoft’s AI models, while OpenAI would continue to rely on Microsoft’s cloud services.

DW also points to a logic of this approach: Amazon and Alphabet invest in a contract with OpenAI — Anthropic, and Anthropic then uses Amazon and Google services to train its models. In turn, Deutsche Welle says, Nvidia’s “circular” financing is a technological strategy that helps maintain its market positions.

DW also notes that Nvidia, together with investors, could be using AI chip demand to shift the AI chip market, while the company invests in AI startups in a “non-obvious” way. It also says that Nvidia has a partnership with SK Group, which, according to the report, could be able to provide up to $500 billion.

Regarding OpenAI’s financing, DW claims that the “circular” approach is based on using shared resources and internalizing the benefits for developing AI. Deutsche Welle’s material about the “circular” AI-chip model says that OpenAI’s general direct investor would be investing in $5–7 trillion for the development of future AI computing platforms, while the same report says that OpenAI does not plan to break this down and instead would only work through the participants’ mutual interest by 2030.

A separate Forbes article publishes information about a model that the outlet says involves the participants in the AI market, which could be intended to create a chain of deals between OpenAI and Anthropic, as well as to work with Chinese AI-industry companies. In the article, Forbes argues that the participants’ chain of deals could help Chinese models become competitive in the American market.

Tags: Economy/Technology/AI