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Nvidia to Invest Up to $100 Billion in OpenAI
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Good morning, CFOs. Nvidia’s $100 billion investment in OpenAI; Spirit Airlines plans to furlough one-third of its flight attendants; plus, how declining cereal sales and job cuts have worn on Kellogg’s hometown.
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Nvidia’s investment into OpenAI envisions a future where adoption of AI products will continue to surge among users. PHOTO: QILAI SHEN/BLOOMBERG NEWS
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Nvidia and OpenAI, two U.S. giants powering America’s race for AI superintelligence, outlined an expansive partnership Monday, including plans for an enormous data center buildout and a $100 billion investment by the chip maker into the startup.
The deal announced Monday will allow OpenAI to build and deploy at least 10 gigawatts of Nvidia systems for its artificial-intelligence data centers to train and run its next generation of models. That amount of electricity is roughly comparable to what is produced by more than four Hoover Dams or the power consumed by eight million homes.
“This is a giant project,” Nvidia Chief Executive Jensen Huang said Monday in an appearance on CNBC, calling OpenAI the “fastest-growing software company in history.”
The partnership is a bet on continued model improvements, essentially that investments of hundreds of billions of dollars from investors, companies, governments and Wall Street financiers will create AI models that are smarter than humans. That bet runs contrary to the view of some skeptics who say model development is hitting a wall.
OpenAI CEO Sam Altman, Mark Zuckerberg, Elon Musk and other tech luminaries are believers that new investment and brute force computing power will bring models into a new “superintelligent” era of AI. In the last year, however, many of the most advanced AI companies have struggled to reach significant model improvements even as investments reach an extraordinary scale.
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Content from our sponsor: Deloitte
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CFOs Have New Rules on Accounting for Software Costs
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More software development costs may be expensed up front, which would affect financials and metrics that could have consequences for budgeting, forecasting, and investment decisions. Read More
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📆 Earnings
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AutoZone
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Micron Technology
📈 Economic Indicators
S&P Global releases both its Manufacturing and Services Purchasing Managers’ Indexes for September.
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What Else Matters to CFOs
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Spirit Airlines told pilots last week that it needed to find $100 million in annual contract savings. PHOTO: RON ADAR/ZUMA PRESS
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Spirit Airlines is planning to furlough one-third of its flight attendants, another effort by the bankrupt airline to slash expenses.
The carrier said Monday that it plans to furlough 1,800 of its roughly 5,200 flight attendants. Hundreds had already been out on voluntary leaves, but Chief Operating Officer John Bendoraitis said Spirit had reached the limit of what it could achieve through such measures.
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“We need to shift our focus to a complete rightsizing of the airline, which means volume-based adjustments to our Flight Attendant group, and across our teams.”
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—Spirit Chief Operating Officer John Bendoraitis wrote in an employee message.
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Where senior finance leaders confront today’s expanding remit. Connect on capital, regulation, technology, and talent — and lead with clarity.
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CNX Resources, the Appalachia-focused natural gas company, said finance chief Alan Shepard has been named as its next chief executive officer. Shepard will assume the role of president and CEO effective Jan. 1, succeeding Nick Deiuliis, who will retire at the end of 2025 after 35 years at the company, CNX said. Shepard, who rejoined CNX in 2020, has served as CFO since 2022 and president since June this year. A new CFO is expected to be named by the end of the year.
—Robb M. Stewart contributed to today’s Ledger.
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The Wall Street Journal's CFO Journal offers corporate leaders and professionals CFO analysis, advice and commentary to make informed decisions. We cover topics including corporate tax, accounting, regulation, capital markets, management and strategy. Follow us on X @WSJCFO. The WSJ CFO Journal Team comprises reporters Kristin Broughton, Mark Maurer and Jennifer Williams, and Bureau Chief Walden Siew. You can reach us by replying to any newsletter, or email Walden at walden.siew@wsj.com.
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