Wall Street Lunch: Nvidia And OpenAI Deal Begins Next Stage Of AI Growth

Listen below or on the go on Apple Podcasts and Spotify

Wedbush says the Nvidia-OpenAI ushers in a new phase in AI development. (0:15) Alibaba unveils its new large language model. (1:17) Nissan shows off AI self-driving. (2:08)

This is an abridged transcript of the podcast:

Our top story so far, Wedbush says the next stage of the AI revolution has begun following Nvidia (NASDAQ:NVDA) and OpenAI’s massive deal.

Nvidia plans to invest up to $100 billion into OpenAI to build and deploy at least 10 gigawatts of data center capacity. Nvidia will also provide 4-5 million GPUs. Wedbush noted that this figure totals the entirety of the number of GPUs Nvidia will ship in 2025 and double what it shipped in 2024.

Analyst Dan Ives said: “This announcement cements further ties between Nvidia and OpenAI to lead the AI Revolution taking place front and center while providing OpenAI with ample sources of capital at cheaper costs by reducing the credit risk of lending with OpenAI.”

The ongoing data center build out is positive for cloud giants such as Microsoft (MSFT), Google (GOOG) (GOOGL) and Amazon (AMZN), he added.

Wedbush also highlighted large-scale AI investments recently announced around the globe, such as in the United Arab Emirates, Saudi Arabia and the United Kingdom.

“While the bears will fret about valuations and have been skeptical of the historical tech rally, we stress that if you focus solely on valuation looking out a year with P/E … you would have missed every transformational growth tech stock the last 20 years,” Ives said.

Among active stocks, Alibaba (BABA) unveiled its open-source large language model called Qwen3-Omni. The model can process text, images, audio, and video but delivers real-time streaming responses in text and natural speech.

Firefly Aerospace’s (FLY) is under pressure following weak results in what was the company’s first earnings report since its stock market debut last month.

The space and defense technology company reported revenue of $15.55 million, below analyst estimates of $17.25 million and down 26% from the same quarter a year ago.

And Scholar Rock (SRRK) is tumbling after the biotech said that the FDA has issued a Complete Response Letter in connection with its marketing application for its lead drug, apitegromab, declining its availability in the U.S.

The company submitted a Biologics License Application with the FDA early this year to obtain the agency’s approval of the drug to treat spinal muscular atrophy, a rare neuromuscular disease.

In other news of note, Nissan (OTCPK:NSANY) unveiled its latest artificial intelligence-powered self-driving technology this week as it looks to compete directly with Tesla (TSLA) and other leaders in the autonomous vehicle industry.

The Japanese automaker said its new advanced system integrates data from 11 onboard cameras, high-precision LiDAR sensors, and multiple radar units to achieve high-level situational awareness and real-time processing.

In a recent public demonstration in downtown Tokyo’s Ginza district, a Nissan Ariya equipped with the new technology skillfully navigated complex urban environments, including stopping for red lights and yielding to pedestrians and other vehicles at intersections. Nissan noted that the capabilities go well beyond earlier versions designed primarily for highways.

And in the Wall Street Research Corner, a massive spending boom on artificial intelligence infrastructure is saving the U.S. economy from a recession. That’s according to George Saravelos, Global Head of FX Research at Deutsche Bank.

Saravelos describes the AI investment cycle as a “Deus ex Machina,” a timely intervention that is masking broader economic weakness.

Without this concentrated, tech-related spending, the U.S. “would be close to, or in, recession this year.” This massive capital expenditure to build up AI capabilities is the “missing ingredient” that explains several macroeconomic puzzles. It accounts for a significant slowdown in employment growth that hasn’t tipped into a recession, as the AI-driven capital investment doesn’t require many workers.

Saravelos says that it may not be an exaggeration to say that Nvidia (NVDA), as a key supplier for the AI investment cycle, “is currently carrying the weight of US economic growth.”

Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.