Nvidia CEO Jensen Huang told attendees at the Morgan Stanley Technology, Media and Telecom conference in San Francisco that his company’s recent investments in OpenAI and Anthropic will likely be its last in either, citing anticipated IPOs as the reason the investment window closes.
The explanation is tidy. It is also difficult to reconcile with how late-stage private investing actually works, where firms routinely back companies deep into pre-IPO territory. Something else may be driving the decision.
The Math Was Always Strange
When Nvidia first announced it would invest up to $100 billion in OpenAI in September, MIT Sloan professor Michael Cusumano described the arrangement to the Financial Times as “kind of a wash,” noting that “Nvidia is investing $100 billion in OpenAI stock, and OpenAI is saying they are going to buy $100 billion or more of Nvidia chips.” The circularity was visible from the start.
The numbers also quietly shrank. The investment Nvidia finalized last week as part of OpenAI’s $110 billion round came in at $30 billion, well short of that original pledge. Huang has dismissed suggestions of bad blood with OpenAI as “nonsense,” but the gap between the announced figure and the final one is notable.
Nvidia’s own public position on its investments hasn’t added much clarity. Asked for comment after Huang’s remarks, a spokesman pointed to a transcript from the company’s fourth-quarter earnings call, where Huang described all of Nvidia’s investments as “focused very squarely, strategically on expanding and deepening our ecosystem reach.”
The Anthropic Situation Got Complicated Quickly
The relationship with Anthropic has been harder to manage. Two months after Nvidia announced a $10 billion investment in November, Anthropic CEO Dario Amodei appeared at Davos and, without naming Nvidia directly, compared U.S. chip companies selling high-performance AI processors to approved Chinese customers to “selling nuclear weapons to North Korea.”
That was the opening act. Days ago, the Trump administration blacklisted Anthropic, barring federal agencies and military contractors from using its technology after the company refused to allow its models to be used for autonomous weapons or mass domestic surveillance. Within hours, OpenAI announced its own deal with the Pentagon, a move Anthropic publicly called “mendacious.”
The public appeared to side with Anthropic. Within 24 hours of the competing announcements, Anthropic’s Claude climbed to the top of the free-app rankings on Apple’s U.S. App Store, overtaking ChatGPT. At the end of January, according to Sensor Tower data, Claude sat outside the top 100.
Two Portfolio Companies, Opposite Trajectories
Nvidia now holds stakes in two companies moving in sharply different directions, one actively partnering with the Pentagon, the other being shut out of federal contracts. For a chip supplier selling to both, the positioning is awkward.
Nvidia already mints significant revenue selling the chips that power both companies. The strategic rationale for continuing to invest beyond ecosystem development was always thin. Now, with OpenAI and Anthropic in open conflict over defense contracts and public perception, the complication level has risen considerably.
Huang’s IPO explanation may carry some truth. But the sequence of events surrounding both investments points to a company recognizing it has wandered into unusually volatile territory and choosing a clean, uncomplicated reason to step back.
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