Martin Shkreli Defends Nvidia-OpenAI Deal: It's A 'Lot More Efficient' This Way — 'Pharma Bro' Cites Growing 'Non-Party Demand'

Investor Martin Shkreli came out in support of the $100 billion investment pledge made by chipmaker NVIDIA Corp. (NASDAQ: NVDA) to ChatGPT-parent OpenAI last week, while arguing that critics are missing the point of how value is created and measured in such partnerships.

‘A Lot More Efficient’ This Way

Last week, in a post on X, Shkreli said, “I know there are some questions about this, including from some smart people. But there is a word for this that describes this exact situation: an economy.”

According to Shkreli, the way to measure the success of “an economy” is not based on trading between partners, but by “non-party demand.” This demand, he said, was “pretty high and growing quickly.”

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Challenging the notion that the deal creates a “circular” loop, where Nvidia funds OpenAI only for those funds to return via chip purchases, Shkreli said that it's actually “a lot more efficient” this way. Without Nvidia's direct support, he said, OpenAI would be stuck raising capital “at terrible prices in a capacity-constrained private market.”

Since OpenAI is still privately held, Shkreli says that there’s “only so much demand” for its private shares when raising funds elsewhere, which ultimately will be given to Nvidia, from where the company acquires its much-needed GPUs.

The ‘Smartest’ Investment

Last week, Nvidia CEO Jensen Huang defended his company’s $100 billion investment in OpenAI, calling it “some of the smartest we can possibly imagine,” adding that OpenAI was the world’s next “multi-trillion-dollar” hyperscale company, while speaking on the Open Source podcast.

Others, such as economist Peter Schiff, have noted that Nvidia’s deal mirrors the U.S. Government’s fiscal model, which involves countries like Japan and China lending the nation money, in order to create demand for their own exports.

“Nvidia is doing with ChatGPT what the world does with the U.S.," which is, "they loan us money, so we can buy their goods,” he said in a post on X last week.

Shares of Nvidia were up 0.28% on Friday, closing at $178.19, and are up 0.51% in overnight trade. The stock scores high in Benzinga’s Edge Stock Rankings, with a favorable price trend in the short, medium and long terms. Click here for deeper insights into the stock, its peers and competitors.

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