Nvidia's $70 billion bet on OpenAI, Anthropic, and others could pay off big for shareholders

Nvidia has committed $70 billion in equity investments into AI ecosystem partners, including $30 billion in OpenAI, up to $10 billion in Anthropic, and $5 billion in Safe Superintelligence, according to Bank of America analyst Vivek Arya. Arya said the investments are manageable given Nvidia's projected free cash flow of about $470 billion over 2026-2027, and that the company can still return 50% of free cash flow to shareholders as committed in May 2026. Nvidia shares are about 5% below their $236.54 52-week high ahead of its Aug. 26 earnings report.

Arguably, no one has more at stake than Nvidia NVDA https://finance.yahoo.com/quote/NVDA/ in the AI boom. Next-gen companies such as Elon Musk's SpaceX SPCX https://finance.yahoo.com/quote/SPCX/ are clamoring for Nvidia's high-powered computing chips https://finance.yahoo.com/technology/article/nvidia-stock-rises-after-musk-says-spacex-will-exclusively-use-companys-chips-211803293.html , which are at the heart of the investment thesis on the company. But investors should also consider the formidable investment portfolio Nvidia now holds. When companies like OpenAI OPAI.PVT https://finance.yahoo.com/quote/OPAI.PVT/ and Anthropic ANTH.PVT https://finance.yahoo.com/quote/ANTH.PVT/ inevitably go public at stratospheric valuations within the next year, Nvidia's early backing of these companies stands to drive additional value for its shareholders. The Nvidia investment portfolio Nvidia has committed to directly providing $70 billion in equity investments into ecosystem partners, per new research from Bank of America analyst Vivek Arya. Recent investments include $30 billion in OpenAI, up to $10 billion in Anthropic, and $5 billion in Safe Superintelligence. "Overall, we view Nvidia's $70 billion investments as easily manageable given its ability to generate as much as about $470 billion of free cash flow over just the next two years 2026-2027 , or about 15% of free cash flow," Arya wrote. "In other words, we see no issue in Nvidia returning 50% of free cash flow to shareholders as it has committed to in May 2026." AlphaSpace stat to know: $236.54 Nvidia's stock has been quietly gaining steam ahead of its Aug. 26 earnings report, notching a 4% gain in the past month. The S&P 500 ^GSPC https://finance.yahoo.com/quote/^GSPC/ is up 2.4% during that same stretch. With that rally in the mix, Nvidia shares are only about 5% below the $236.54 52-week high, per Yahoo Finance AlphaSpace https://finance.yahoo.com/about/promos/gold/alphaspace?100003557 analysis. The bottom line If there is any reason to proceed with caution ahead of Nvidia's earnings, it's that the market is positioned for the company to post something great and for CEO Jensen Huang to sound super bullish on the earnings call. They also know there is minimal downside risk to Nvidia's investment portfolio, given the rising valuations being afforded to most privately held names in AI. Arya explained, "The stock has come under pressure following the last April 4 and June 10 earnings, as expectations are elevated. However, we remain positive on potential with Nvidia's next-gen Vera Rubin product cycle in further cementing the company's about 70% industry share." Brian Sozzi is Yahoo Finance's Executive Editor, host of the Power Players with Brian Sozzi podcast, and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi , Instagram , and LinkedIn . Tips on stories? Email brian.sozzi@yahoofinance.com. Click here for in-depth analysis of the latest stock market news and events moving stock prices Read the latest financial and business news from Yahoo Finance