12:15 PM EDT, 09/23/2025 (MT Newswires) -- Nvidia's ( NVDA ) new partnership with OpenAI will likely generate about $400 billion in revenue for the chipmaker over a multi-year timeline, UBS Securities said in a note e-mailed Tuesday.

The chipmaking giant and the parent of generative artificial intelligence chatbot ChatGPT signed a letter of intent to deploy at least 10 gigawatts of Nvidia ( NVDA ) systems for OpenAI's next-generation AI infrastructure. The companies expect the first gigawatt of Nvidia ( NVDA ) systems to be deployed in the second half of 2026.

Nvidia ( NVDA ) intends to invest up to $100 billion in Microsoft ( MSFT )-backed (MSFT) OpenAI as part of the collaboration.

Each gigawatt is estimated to translate into around $50 billion of total spend, of which 60% to 70% could be addressed by the compute and networking businesses of Nvidia ( NVDA ), according to UBS analyst Timothy Arcuri.

"While timing will, to a large degree, depend on OpenAI's ramp plan, we estimate this deal ultimately translates into (about $400 billion) of Nvidia ( NVDA ) revenue over a multiyear period," Arcuri wrote.

The deal with OpenAI "helps to flesh out multiyear visibility to the substantial growth headroom" that Nvidia ( NVDA ) laid out during its most recent earnings call, according to Arcuri.

Nvidia ( NVDA ) aims to "scale into effectively $3 trillion to $4 trillion AI infrastructure opportunity" over the next five year, Chief Executive Jensen Huang told analysts in August, according to a FactSet transcript.

UBS said that OpenAI likely approached Nvidia ( NVDA ) for this partnership as it needed a capital boost.

The brokerage has a buy recommendation on Nvidia ( NVDA ) with a price target of $205.

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