OpenAI Trashes Nvidia

An exclusive report by Reuters says that OpenAI has partially turned its back on Nvidia Corp. (NASDAQ: NVDA), which was supposed to be an investor in a new round raising $100 billion.

According to the report:

OpenAI is unsatisfied with some of Nvidia’s latest artificial intelligence chips, and it has sought alternatives since last year, eight sources familiar with the matter said, potentially complicating the relationship between the two highest-profile players in the AI boom.

Something Better?

This decision is an odd one, since Nvidia is widely regarded as the provider of the industry’s most advanced chips. It is hard to figure out where OpenAI would get other chips. Perhaps AMD, though it is well behind Nvidia in the opinion of most experts.

Amazon recently released its own AI chip called Trainium3. Google has a product called Ironwood TPU. Microsoft has announced it also has an AI chip of its own. Yet, Nvidia is such a dominant and entrenched company that it is hard to see how any of these will soon gain traction. Another possibility is Groq, which makes AI chips, but Nvidia bought it for $20 billion. However, under the terms of the purchase, Groq can still sell products to other companies.

The emerging conflict between Nvidia and OpenAI may be related to Nvidia’s reluctance to participate in an OpenAI investment round of $100 billion. Nvidia CEO Jensen Huang said he never had…