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Investing.com -- Nvidia’s planned $100 billion investment in OpenAI could generate around $400 billion of revenue for the chipmaker over time, according to UBS.
The firm said in a note Tuesday answering key questions and explaining its thoughts on the move that, “each GW equates to ~$50B in total spend, of which 60-70% is addressable by NVDA’s compute and networking businesses.”
The partnership will see OpenAI deploy “at least 10GW of NVDA capacity starting in C2H26,” UBS said.
The bank explained that timing will depend on “OpenAI’s ability to scale its model offtakes and users,” but Nvidia emphasized its position as OpenAI’s preferred partner.
UBS noted that the deal provides “multi-year visibility to the substantial growth headroom.”
Nvidia outlined when it set out a $3-4 trillion total addressable market (TAM) by 2030, of which its share has been 30-35%.
Management told UBS the engagement with OpenAI is part of that broader TAM but “provides greater visibility on the path towards ~$1T in DC revenue by 2030.”
On whether this capacity overlaps with Oracle’s, UBS said Nvidia “was unclear” but pointed to OpenAI’s past comments about further expanding its data center footprint.
The firm added: “This feels the most negative for AMD as it solidifies NVDA’s market dominance,” while Broadcom’s ASIC revenues could be impacted but remain large.
UBS also addressed risk concentration. “Management emphasized that it is not simply a supplier to OpenAI but a strategic partner – and has been for the past ~10 years.” Nvidia expects demand from other large language model vendors to support growth.
UBS kept its price target at $205, valuing Nvidia at about 29x earnings on CY26/27 estimates.