Demand Progress is shining a spotlight on AI hardware company Nvidia’s dangerous new partnership with OpenAI
Nvidia is bringing its Super Bowl of AI conference to Washington, D.C. this week, right after announcing a dangerous partnership with OpenAI that threatens to monopolize the AI market. In response, Demand Progress is mobilizing with other anti-monopoly groups to shed light on the dangerous OpenAI-Nvidia deal.
“Nvidia and OpenAI are threatening to dominate not only the AI market, but the entire U.S. economy—leading to higher prices and less power for everyday Americans,” said Demand Progress Policy Director Emily Peterson-Cassin. “The FTC must investigate the glaring antitrust concerns raised by this suspicious partnership between the leader in AI hardware and the leader in AI software.”
THE FACTS ON THE NVIDIA-OPENAI DEAL:
- Last month, Nvidia and OpenAI announced a partnership in which Nvidia will invest $100 billion into OpenAI, and OpenAI will use that investment to purchase Nvidia chips.
- The deal may be structured to avoid antitrust scrutiny. In January, the Federal Trade Commission specifically warned about AI partnerships that "create lock-in" and use "circular spending" to undermine open markets and stifle innovation. These partnerships offer the benefits of a merger while avoiding government scrutiny.
- Nvidia has already abused its market power. The company’s near-total dominance of the markets for high-end AI chips give Nvidia pricing power that has led to unprecedented and alarming gross profit margins above 70 percent.
- OpenAI has run this play before. Before partnering with Nvidia, OpenAI ran a similar play with its $13 billion deal with Microsoft. Now the company commands approximately 81 percent of global AI chatbot web traffic.
- The deal hurts every company that isn’t Nvidia or OpenAI. Having the two market leaders partner up could lead to an AI future built on Nvidia hardware and OpenAI models where everyone else is at their mercy.
The deal threatens national security. Nvidia CEO Jensen Huang already lobbied President Trump to secure approval to sell advanced AI chips to China. A combined Nvidia-OpenAI leviathan would wield even greater influence over government policy.