Artificial intelligence has unleashed one of the largest capital waves in tech history, with more than $2 trillion in spending now planned for the next five years.
Energy demands alone are projected at 40 gigawatts, enough to rival the capacity of small nations. And at the heart of nearly every project sits Nvidia, whose chips have become the backbone of modern AI.
A Flood of Billion-Dollar Commitments
In just the past few weeks, Nvidia has tied itself to some of the biggest initiatives in the industry. The company agreed to invest as much as $100 billion in OpenAI to supply compute and hardware, struck a partnership with Alibaba to scale training and storage infrastructure, and committed $5 billion to Intel so its CPUs can run directly inside Nvidia’s AI systems.
In Europe, Nvidia joined Dell and Nokia in backing London-based startup Nscale, which secured $1.1 billion to roll out AI data centers across the U.K. and beyond. These deals reinforce the idea that Nvidia is no longer just a supplier – it is shaping the very foundations of AI’s physical infrastructure.
Wall Street’s View
This wave of announcements has turned Nvidia into the most heavily endorsed stock in the sector. Barclays this week lifted its target price to $240 from $200, calling it the best play in AI. Analyst Tom O’Malley pointed out that the company is uniquely positioned to capture the spending surge, and average daily flows into its hardware already show that advantage. Shares are up 31% this year despite a minor pullback on Thursday.
The OpenAI-Nvidia Feedback Loop
Still, some analysts warn the money may be sloshing around the same handful of players. OpenAI raises capital from Microsoft and others, then spends those billions on Nvidia GPUs, which in turn boosts earnings across the same circle of companies. Jamie Zakalik of Neuberger Berman calls it a “cash loop” that flatters revenue but doesn’t guarantee genuine innovation.
What Comes Next
For now, the bullish case dominates: governments, corporations, and venture firms are pouring record sums into compute, and Nvidia is the first call for almost all of them. The open question is whether this unprecedented spending spree leads to sustainable breakthroughs – or whether it inflates balance sheets without producing much beyond higher valuations.
