Nvidia’s $100B AI Power Deal with OpenAI Sparks Energy Concerns

The deal, formalized through a letter of intent, represents a colossal wager on the insatiable demand for computational power. Nvidia will provide the funding in stages, with an initial $10 billion disbursement upon signing, according to a Bloomberg report citing people familiar with the matter. In return for its investment, the chipmaking giant will receive equity in OpenAI, cementing a deeply intertwined financial and strategic relationship. The market responded positively to the announcement, with Nvidia’s stock (NVDA) climbing 4% from $177.50 to $184.16.

Nvidia CEO Jensen Huang framed the partnership as a pivotal moment for the technology. “The computing demand is going through the roof,” Huang told CNBC. “This partnership is about building an AI infrastructure that enables AI to go from the labs into the world. This is about the AI industrial revolution arriving.” The plan involves constructing vast new data centers populated with millions of GPUs, including Nvidia’s upcoming Vera Rubin platform, designed to train and run next-generation AI models. The first gigawatt of capacity is slated to come online in the second half of 2026.

For OpenAI, the deal provides the raw horsepower needed to pursue increasingly ambitious AI models. CEO Sam Altman, who appeared alongside Huang and OpenAI President Greg Brockman, explicitly referred to compute power as the “fuel” required to drive improvement, build better models, and generate revenue. “This is helping us, along with our partners at Stargate, Microsoft, and Oracle, to build increasing amounts of infrastructure to deliver on what the world is demanding,” Altman stated. He also indicated that the partnership would expand upon the ambitions of the Stargate project, which was announced earlier in the year.

The scale of the undertaking is almost incomprehensible. A single gigawatt equals one billion watts of power, and deploying 10 gigawatts of dedicated AI compute represents an energy footprint equivalent to that of a major metropolitan area. This infrastructure is the backbone upon which the next leap in artificial intelligence capability depends, moving from theoretical research to widespread, real-world application.

While the technological promise is vast, the partnership casts a spotlight on the significant environmental costs of the AI boom. The logistical challenge of deploying 10 gigawatts is immense. Energy consultancy 174 Power Global notes that cooling systems alone can consume nearly 40% of a data center’s total power use, a substantial overhead on an already massive energy draw.

Broader estimates paint a concerning picture for global resources. Deloitte projects that data centers will account for approximately 2% of global electricity use in 2025, equivalent to 536 terawatt-hours. However, the consultancy warns that demand from power-hungry AI applications could push that figure to more than 1,000 terawatt-hours by 2030. Organizations like the United Nations Environment Programme and the Environmental and Energy Study Institute have issued warnings about rising water consumption for cooling and the strain that data centers are already placing on electric grids worldwide.

The Nvidia-OpenAI deal, therefore, sits at the center of a critical tension. It simultaneously represents the greatest single investment in the future of AI and a potent symbol of the sustainability challenges that the industry must urgently address. As the first gigawatts of this new infrastructure prepare to come online in 2026, the world will be watching to see if the AI industrial revolution can be powered without overwhelming the planet’s resources.