Investing.com — Nvidia (NASDAQ:NVDA) stock fell 0.7% in after-hours trading Monday, following a 2.9% decline during the regular session, after Reuters reported that OpenAI is dissatisfied with some of Nvidia’s latest AI chips and has been seeking alternatives.
According to the report, OpenAI began looking for alternative chip suppliers last year, particularly for AI inference – the process where models like ChatGPT respond to user queries. While Nvidia remains dominant in chips for training large AI models, inference has become a new competitive battleground in the semiconductor industry.
This development could potentially strain the relationship between two of AI’s most prominent players, especially as the companies have reportedly been in investment talks. The news comes after Nvidia’s stock had already declined earlier in the day following a Wall Street Journal report that negotiations for Nvidia to invest up to $100 billion in OpenAI had broken down.
Nvidia CEO Jensen Huang later clarified that the company would “absolutely” be involved in OpenAI’s current funding round, though he indicated the investment would be “nothing like” the previously reported $100 billion figure.
The developments highlight potential challenges to Nvidia’s dominant position in the AI chip market, as major customers like OpenAI explore alternatives for specific AI processing needs.
Mizuho analyst Daniel O’Regan commented on today’s fall, saying “I think the story hurts sentiment around a key customer of NVDA in OAI.”
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