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On Monday, OpenAI and Nvidia jointly announced a letter of intent for a strategic partnership to deploy at least 10 gigawatts of Nvidia systems for OpenAI's AI infrastructure, with Nvidia planning to invest up to $100 billion as the systems roll out. The companies said the first gigawatt of Nvidia systems will come online in the second half of 2026 using Nvidia's Vera Rubin platform.

"Everything starts with compute," said Sam Altman, CEO of OpenAI, in the announcement. "Compute infrastructure will be the basis for the economy of the future, and we will utilize what we're building with NVIDIA to both create new AI breakthroughs and empower people and businesses with them at scale."

The 10-gigawatt project represents an astoundingly ambitious and as-yet-unproven scale for AI infrastructure. Nvidia CEO Jensen Huang told CNBC that the planned 10 gigawatts equals the power consumption of between 4 million and 5 million graphics processing units, which matches the company's total GPU shipments for this year and doubles last year's volume. "This is a giant project," Huang said in an interview alongside Altman and OpenAI President Greg Brockman.

To put that power demand in perspective, 10 gigawatts equals the output of roughly 10 nuclear reactors, which typically output about 1 gigawatt per facility. Current data center energy consumption ranges from 10 megawatts to 1 gigawatt, with most large facilities consuming between 50 and 100 megawatts. OpenAI's planned infrastructure would dwarf existing installations, requiring as much electricity as multiple major cities.

The partnership follows OpenAI's rapid user growth to 700 million weekly active users. Nvidia's stock rose nearly 4 percent on Monday following the announcement, adding roughly $170 billion to its market capitalization. The partnership establishes Nvidia as OpenAI's preferred strategic compute and networking partner, alongside OpenAI's existing relationships with Microsoft, Oracle, SoftBank, and the recently announced Stargate project partners.

The partnership announcement comes a week after Nvidia disclosed a $5 billion investment in Intel, taking a 4 percent stake in its longtime competitor as the two companies plan to co-develop custom data center and PC products.

Bryn Talkington, managing partner at Requisite Capital Management, noted the circular nature of the investment structure to CNBC. "Nvidia invests $100 billion in OpenAI, which then OpenAI turns back and gives it back to Nvidia," Talkington told CNBC. "I feel like this is going to be very virtuous for Jensen."

Racing for nuclear power

In an August earnings call, Huang told investors that building one gigawatt of data center capacity costs between $50 billion and $60 billion, with about $35 billion going toward Nvidia chips and systems. At that rate, the 10 gigawatt project could require total investment exceeding $500 billion.

While the companies did not specify power sources in their announcement, the massive energy requirements have driven other tech giants to nuclear partnerships for similar projects. In September 2024, Microsoft signed a 20-year agreement to restart a Three Mile Island reactor for 835 megawatts, while in May of this year, Amazon Web Services purchased a data center next to Pennsylvania's Susquehanna nuclear plant with plans to use up to 960 megawatts.

Other massive AI infrastructure projects are emerging across the US. In July, officials in Cheyenne, Wyoming, announced plans for an AI data center that would eventually scale to 10 gigawatts—consuming more electricity than all homes in the state combined, even in its earliest 1.8 gigawatt phase. Whether it's connected to OpenAI's plans remains unclear.

Altman's ambition for mega-sized datacenter deals now stretches back over a year. In September of last year, Constellation Energy CEO Joe Dominguez told Bloomberg he had heard Altman wanted five to seven data centers of 5 gigawatts each. Alex de Vries of Digiconomist told Fortune that seven 5-gigawatt units would have "twice the power consumption of New York State combined."

The planned infrastructure buildout would significantly increase global energy consumption, which also raises environmental concerns. The International Energy Agency estimates that global data centers already consumed roughly 1.5 percent of global electricity in 2024. OpenAI's project also faces practical constraints. Existing power grid connections represent bottlenecks in power-constrained markets, with utilities struggling to keep pace with rapid AI expansion that could push global data center electricity demand to 945 terawatt hours by 2030, according to the International Energy Agency.

The companies said they expect to finalize details in the coming weeks. Huang told CNBC the $100 billion investment comes on top of all Nvidia's existing commitments and was not included in the company's recent financial forecasts to investors.