OpenAI Reportedly Plans to Buy Google's AI Chips. Should You Sell Nvidia Stock?

OpenAI plans to buy Google's artificial intelligence (AI) chips, The Information reported on Tuesday, Oct. 27, citing someone familiar with the matter. Reuters, which carried the report, said no financial terms or other details were disclosed. OpenAI declined to comment.

That looks like bad news for Nvidia (NASDAQ:NVDA). OpenAI is one of the largest buyers of Nvidia's graphics processing units (GPUs), and Alphabet's (NASDAQ:GOOGL)(NASDAQ:GOOG) Google builds the best-known alternative, its tensor processing units (TPUs).

Yet the stock hardly moved. Nvidia shares were little changed on Wednesday morning as of this writing, around $218. Tuesday's close of $217.94 had already put them about 9% off their Oct. 6 record of $239.24.

Should investors sell Nvidia stock on the news? I'd argue the report says less than its headline implies. It describes OpenAI adding chips while Nvidia can't make enough of its own.

Image source: Nvidia.

A plan, not a purchase order

OpenAI has used Google's chips before. Reuters reported in June 2025 that OpenAI had begun renting Google's TPUs, but OpenAI said days later that it was just in early testing with some of them and had no plans to deploy them at scale. What's new is ownership: OpenAI would reportedly buy the chips rather than rent time on them, and Google started selling TPUs straight to some customers this year.

Notably, the report, as Reuters relayed it, didn't say OpenAI is cutting back on Nvidia. And OpenAI's Nvidia plans are big.

In August, Nvidia said OpenAI's current and planned commitments add up to around 12 gigawatts of Nvidia computing, and it put the opportunity, including a possible increase to about 16 gigawatts, at about $600 billion through 2030. The same month, Nvidia agreed to guarantees capped at $105 billion that cover parts of the lease and power payments at an Ohio data center campus OpenAI will lease. In return, the campus will house only Nvidia's AI hardware, with limited exceptions.

That's a strange deal for a customer planning to leave.

How much does OpenAI matter to Nvidia?

Nvidia doesn't put a number on it. Its latest quarterly filing, covering the fiscal 2027 second quarter (the period ended July 26, 2026), says only that it estimates one unnamed "AI research and deployment company" contributed "a meaningful amount" of its revenue by buying cloud services from Nvidia's customers.

Yes, $600 billion through 2030 is a lot of money, even for a company that brought in $96.2 billion in revenue in its fiscal second quarter, up 106% from a year earlier. If OpenAI shifted a big part of those plans to Google's chips, Nvidia's sales could take a noticeable hit.

But the report doesn't say that. And today, Nvidia's bigger issue is making enough product.

Nvidia can't make enough chips

On Nvidia's August earnings call, chief financial officer Colette Kress said Nvidia expects revenue to climb around 70% in fiscal 2028 (its year through January 2028). She called it a supply-constrained outlook, adding that customers' forecasts point to Nvidia's growth doubling next year.

"Our demand is much higher than that," CEO Jensen Huang said on that same call, after explaining that Nvidia has supply for around 70% growth.

Showing how hard Nvidia is chasing supply, its commitments to suppliers shot up to $279 billion as of the end of fiscal Q2 from $119 billion three months before and $95.2 billion in late January. Management said the latest rise came largely from memory purchases. In other words, the commitments almost tripled over two quarters, and the increase accelerated sharply in the second of them. That arguably shows Nvidia expects demand to run far beyond what it can make now.

In a market like that, chips OpenAI doesn't buy from Nvidia probably go to the next customer in line.

Sure, that might change when supply catches up to demand. Oracle said Tuesday it plans to offer Google's chips on its cloud starting in 2027, and more options could eventually weigh on Nvidia's pricing. But Kress said she expects supply to stay a bottleneck at least through the end of fiscal 2028.

Nvidia stock is priced for a slowdown

With shares around $218, investors pay about 14 times the earnings analysts, on average, forecast for Nvidia's fiscal 2028. Alphabet's shares, by comparison, cost about 21 times its expected 2027 earnings. At this discount, I think investors already assume Nvidia's growth will slow sharply and rivals will gain share.

Is the report a reason to sell Nvidia stock? I don't think so. OpenAI buying Google's chips would matter more when Nvidia can make all the chips its customers want, and management doesn't expect that before fiscal 2028 ends.

I wouldn't sell the stock over a reported plan with no disclosed terms.

Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Nvidia, and Oracle. The Motley Fool has a disclosure policy.