To The Moon

Monday, September 22, Eastern Time,$Nvidia (NVDA) $Announced with OpenAI that it has signed a letter of intent to establish a strategic cooperation. OpenAI will use Nvidia's systems to build and deploy at least 10 gigawatts (GW) of AI data centers, and use millions of Nvidia's graphics processors (GPUs) to train and deploy OpenAI's next-generation AI model.

To support the above-mentioned landmark strategic partnership, Nvidia plans to invest up to $100 billion in OpenAI. This is the largest investment commitment made by Nvidia to date. This investment will be gradually put in place with the deployment of every 1GW system, with the first 1GW capacity Nvidia system scheduled to come online in the second half of 2026, using the Nvidia Vera Rubin platform.

After the news of investing in OpenAI's large-scale deployment of data centers was announced, the stock price of Nvidia, which had fallen 1.1% at the beginning of Monday, quickly turned up and rose at the beginning of midday trading in U.S. stocks. 4.5%, closed up more than 3.93%, hitting a record closing high, and fell slightly after hours.

Nvidia CEO Jensen Huang said that the scale of the cooperation with OpenAI is huge, which highlights the close connection between Nvidia and OpenAI.

Huang Renxun told the media on MondayThe capacity of 10GW is equivalent to 4 million to 5 million GPUs. This is equal to Nvidia's total shipments for the whole year, "twice that of last year.""This is a huge project," he said.

Huang Renxun previously said on the earnings conference call,The cost of building 1GW of data center capacity is between $50 billion and $60 billion, of which about $35 billion is used to procure Nvidia chips and systems. Based on this calculation, the total investment scale of the 10GW project will reach hundreds of billions of dollars.

OpenAI currently has more than 700 million weekly active users, and its ChatGPT service requires intensive computing power support. OpenAI CEO Sam Altman said on social media last Sunday that OpenAI will launch some new computing-intensive products in the next few weeks. Due to the high related costs, some features will only be available to Pro subscribers at the beginning.

Strategic significance and market influence

This investment is of strategic significance to Nvidia. Bryn Talkington, managing partner at Requisite Capital Management, told the media: "Nvidia invests US $100 billion in OpenAI, and then OpenAI returns the money to Nvidia. This will be a very virtuous cycle for Huang Renxun."

The cooperation helps Nvidia ensure that its equipment maintains a core position in the construction of AI systems, especially in the context of OpenAI's involvement in the hardware field, including self-developed chips. Maintaining OpenAI as a major customer could help Nvidia strengthen its market position as the industry considers rival components.

Huang Renxun said the investment announced on Monday was "in addition to all projects that have been announced and contracted," suggesting that it was beyond the financial expectations previously disclosed by the company to Wall Street.

David Bader, director of the Institute of Data Science at New Jersey Institute of Technology, commented that the timing of the announcement of the cooperation shows that Nvidia is "diversifying its layout at the geographical (supply chain) and strategic levels (AI value chain)." "This is more like Infrastructure construction, not speculation." Bader also said:"This collaboration shows that AI infrastructure has evolved into a mature asset class. We are witnessing a trend towards vertical integration of AI technology stacks-from chips to training to deployment. Nvidia is no longer just a hardware supplier, but a key partner in the AI economic ecosystem it drives."

Altman says Nvidia and Microsoft are most important partners

This partnership reflects Nvidia's recent aggressive investment expansion strategy. Last week, Nvidia announced its$Intel (INTC) $Invested $5 billion and announced that the two companies will collaborate on AI processors. Nvidia is also investing nearly $700 million in UK data center startup Nscale.

Media reports last week stated that Nvidia also spent more than $900 million to hire Rochan Sankar, CEO of AI startup Enfabrica, and other employees and license the company's technology.

For OpenAI, this partnership complements its in-depth infrastructure construction efforts with Microsoft, Oracle, SoftBank and Stargate project partners. In recent secondary market transactions, investors have valued OpenAI at $500 billion, with Microsoft, SoftBank and Thrive Capital among others among its investors.

In media interviews, Altman described Nvidia and$Microsoft (MSFT) $Both are known as OpenAI's "passive" investors and "most important partners."

Monday's announcements from Nvidia and OpenAI did not disclose details such as the timetable for the $100 billion investment. The companies said they look forward to finalizing the details of this new phase of their strategic partnership in the coming weeks.

For investors who want to chase Nvidia after new highs, they can consider using sell put options to go long Nvidia.

Options Strategy: Go Long Nvidia with Put Options

The current Nvidia price is $183, and we can sell itExpires 10/10/2025, exercise price 185, premium $670Put Option (Put Option) to go long Nvidia.

This strategy can not only profit when Nvidia rises, but even if Nvidia goes sideways or falls slightly, it can still rely on premium to earn earnings.

Operational logicSelling a put option is equivalent to a commitment: If Nvidia's stock price falls below $185 at expiration, you are willing to buy 100 shares of Nvidia at $185. As compensation, you receive $670 premium in advance.

Maximum benefitIf Nvidia's stock price is higher than $185 at expiration, the option will not be exercised, and you do not need to buy the stock, and you can keep the entire $670 premium. This will be the biggest gain of the strategy.

Break-even pointYour actual buying cost is the exercise price of $185 minus $6.7 per premium, or $178.3 per share. So the break-even point is $178.3, and as long as the stock price is above that price at expiration, you are profitable overall.

Maximum lossIf Nvidia's stock price is 0 at expiration (extreme case), you will be bought 100 shares at $185/share, with a total payout of $18,500. While you only gain $670 premium, the final loss is $17,830.

Strategic Advantages

• You can still make profits when the stock price is flat or falls slightly.

• Actually buy Nvidia at a lower price: $178.3 instead of the current market price of $183.

• It is suitable for investors who are optimistic about Nvidia for a long time and want to "buy low".

Strategic risk

• If the stock price falls sharply, it may be necessary to buy Nvidia at a price higher than the market price, resulting in a large loss.

• It is a strategy of "limited income, unlimited risk", and the proportion of positions needs to be strictly controlled.