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The company that leads in AI hardware is investing a huge sum of money and the company that leads in AI software, and it's got people talking.
It's gigantic.
OpenAI and NVIDIA are two of the tentpole American companies.
It has driven the NVIDIA share price up.
They are investing $100 billion in cash.
It's World Business Report from the BBC World Service.
I'm David Harper, and we're looking at what the impact of this investment is likely to be and also ask whether the AI dream we were promised is actually getting any closer.
And we're also looking at Jaguar Land Rover's future, as their factories are still at a standstill following a cyber attack.
And Jimmy Kimmel is back on the American network ABC tonight, or at least he might be.
It depends where you live.
So the world's most valuable company, the US tech firm and chipmaker NVIDIA, has announced it's investing up to 100 billion in another tech giant OpenAI, the creator of ChatGPT, to build database infrastructure for what it calls the next generation of artificial intelligence.
We are following the US push to lead the AI race on planet Earth.
Nvidia announces it will invest up to $100 billion into open AI.
They'll supply those high-performance chips and fund some new data centers.
This announcement comes shortly after Nvidia made a $5 billion investment in Intel.
The scale of the deal is likely to put it under the scrutiny of industry regulators, and the power needed to put it into practice, we are told, is the equivalent to the needs of more than 8 million US households.
Well, let's talk about some of the details here.
We are joined by the BBC's North America technology reporter, Lily Jamali, who's based in San Francisco.
I'm Bob O'Donnell, the founder and chief analyst at the research company Technalysis, who's also in California.
Thank you, both of you, for being with us today.
Lily, to start with you, could you tell us a little bit more about this deal?
Obviously, it's a huge number and it's grabbed a lot of headlines.
But in terms of the details of what we heard, what does it mean in practice?
Yeah, so this is a $100 billion investment that NVIDIA is making in OpenAI.
These are two of the world's most important and influential technology firms.
And NVIDIA, which has been around for quite a while now, and OpenAI, which is a, you know, much newer company, got their start in 2015.
They've had this symbiosis for a long time.
NVIDIA sort of exploded into the public consciousness when ChatGPT came on the scene in 2022.
And OpenAI, of course, is the maker of that very popular AI chatbot.
So what we're talking about here is what I call the bigger is better approach to that Sam Altman over at OpenAI likes to take, which is more data centers, more chips.
All of that means more AI training for their next-generation chatbot.
And the goal here of a number of companies here in Silicon Valley doing AI is something called superintelligence by some.
Others call it AGI.
It's AI that can outsmart humans.
Whether we want that or not is a separate question, but that's what the goal is.
That is a huge debate that I don't think we have time to get into today.
But turning to you Bob, if you look at what these two companies provide, we don't really see the physical data center, the nuts and bolts end of AI, when we use a service like ChatGPT or many others.
But it's interesting because neither one of these can exist without the other.
That's exactly right.
And what is so amazing about this deal?
You just have to give NVIDIA CEO Jensen Huang credit, because he's essentially providing a bunch of money to a company who, in turn, is going to spend it on his own equipment.
So it's an amazingly great deal for NVIDIA and it's very important for OpenAI because, despite the popularity as a business, they've yet to make money and they've talked about eventually making money in 2029.
So some people have started to say, hey, wait a minute here.
Yes, we know it's this amazing thing, but we need to see some returns at some point.
And so there have been questions about their financial capabilities.
Now, all of a sudden, those questions go away because NVIDIA is giving its essentially largest customer the money to buy more stuff.
And so it relieves OpenAI concerns and gives NVIDIA more business.
This is a really interesting factor.
And a lot of people have been talking about this, because we're seeing these huge sums of money flying around, but they're flying around between AI companies.
And that's not the same as somebody from outside putting the money in.
No, it's absolutely not.
It's a very different animal.
However, what it does is it gives the rest of the market confidence to say okay, these OpenAI folks are starting to build a business model that makes sense.
Let's ignore the AI models they're building.
The business model starts to make sense.
We can have more confidence in perhaps loaning them money and doing more deals.
And of course, then we just saw within, like the last hour, OpenAI doing more deals with Oracle and building out more infrastructure there.
Of course, a lot of that will use NVIDIA's chips within it.
So, I mean, this thing is growing like crazy.
To your question earlier, is it really necessary yet?
We'll see, right?
I mean, growth is there.
There's a lot of expectations around what's going to happen.
But that is the big long-term question here of how much capacity is really necessary now and will it be in the future.
We mentioned Jason Huang from NVIDIA there.
Let's hear from him and Sam Altman from OpenAI talking a little bit about the deal on the US TV channel CNBC.
This partnership is about building an AI infrastructure that enables AI to go from the labs into the world.
This is about the AI industrial revolution arriving.
This is like the fuel that we need to drive improvement, to drive better models, to drive revenue everything.
Lily, we were listening to that clip earlier.
And what I found interesting, talking about taking AI from the labs into the real world.
Isn't AI already in the real world?
Aren't we being told all the time that it's already taking over our lives?
Well, it's certainly taken over my life.
As your friendly neighborhood tech reporter.
But yeah no, I think it is something that has insinuated itself into workflows, into the personal lives of people who use it for everything from planning dinner to planning a trip.
It's everywhere for so many of us now.
With the addition of SoftBank from Japan that are kind of helping each other out.
Even though in some ways they're competing, they're also helping each other.
They're also investing in each other.
And there's an analyst named Gil Luria who called NVIDIA out yesterday.
Remember, the stock price went up on this news yesterday.
It's actually down now.
I should note that.
But he said, you know, has NVIDIA become the investor of last resort?
For companies that might be overextended, which OpenAI, in the view of some, is.
They're not profitable yet.
They hope to be.
And you heard Sam Altman mention the word profitable just now in that quote that you played.
So I think that's very much top of mind.
Why aren't there other outside companies or investors getting involved here?
Why is it NVIDIA, which also invested in Intel just last week?
Well and Bob, isn't this a pattern that we've seen in the tech industry so many times, where somebody develops some technology or some kind of service, they're hugely successful at it, they get millions of people signed up, they become a part of everyday life, but they don't make any money out of it?
Yeah, I mean, that is exactly the big challenge with regards to open AI.
And that's why you know, you hear these stories about is there an AI bubble, you know, and is it going to burst and what's going to happen.
And, you know, will open AI, you know, suffer because of that sort of thing?
And that's why I think this deal is so brilliant from Jensen's perspective, because he's basically ensuring that, at least when it comes to OpenAI likely, that bubble doesn't affect them in a way that keeps the investments that are going to be out there and necessary.
But look, we just saw the study from MIT saying 95 percent of these GenAI projects in enterprises haven't really delivered a return on investment yet.
There's a lot more subtlety behind that attention-catching headline, But the reality is there are some questions out there about how this gets deployed.
And as with every technology, this stuff takes a really long time to really get into place and dramatically upstage our lives.
It's starting here, but it takes a while.
And, as so many people in this sector are saying, they feel that we've only just scratched the surface of this.
We'll have to watch and see where that goes.
Lily, Bob, thank you both of you for joining us.
North America technology reporter for the BBC, Lily Jamali, and the founder and chief analyst at the research company Technalysis, Bob O'Donnell, speaking to us both from California.
Let's bring in Kuei Nguyen, the chief investment officer for equity strategies for research affiliates in New York, who is with us for the programme today.
We were talking a little bit about some of the investment that's flying around between companies.
But as much as AI may be potentially overhyped, some people would claim there are no shortage of people who are wanting to put money into the AI sector at the moment.
Well, it is the sector of the moment.
It is the hot story.
It's the hot hand.
But I think one of the things that you always see in the building of a bubble is just this overenthusiasm followed by lack of capital discipline.
And it ultimately builds into a crescendo until it can't sustain itself anymore.
And I think that we're beginning to see some of the signs of that.
Maybe the bubble isn't as big as it's going to get yet, but certainly we are seeing some of that.
I think that's three times.
We've heard the word bubble in connection to this story, on this programme.
That's quite an interesting point.
We'll be back with you in just a while, but we're going to turn now to the Indian-owned British carmaker, Jaguar Land Rover.
They were the victims of a devastating cyber attack last month that ground their factories to a halt, and today they announced they're still unable to produce cars and they probably won't be able to until at least October.
It's at a critical time for the company as well, as they try to reinvent themselves in the face of the many challenges facing the entire industry at the moment.
Our business correspondent Theo Leggett explains how Jaguar Land Rover got to this point.
Jaguar Land Rover, under Tata's ownership, is attempting to rebrand and rebuild the whole company.
So part of that is moving itself upmarket, basically increasing the prices of pretty much everything it makes in order to have higher profit margins and make its products seem more desirable.
So that's part of it.
Then there's the Jaguar brand.
Now, Jaguar is an interesting case because that is...
Described by some people as an iconic brand.
I mean that's an overused word, but Jaguar really has history coming out of its exhaust pipes.
This was the company that built the famous Jaguar E-Type that was used by Hollywood A-listers that won races at Le Mans.
That was part of the swinging 60s.
There's a lot of emotional resonance tied up in that brand.
But in recent years, it's been a part of the company that's not been making any money.
It's made relatively bland products that have been bought by aging middle managers with a set of golf clubs in the car and a cigar in their hands.
Or at least that's the stereotype.
And...
JLR has been aware that that kind of car isn't really selling anymore.
That's not the image it wants to project.
So it's taken the Jaguar brand and decided to recreate it as an all electric mark and to move up market in the process.
The Jaguar Land Rover of tomorrow is upmarket luxury, with a focus for the Jaguar brand on luxury as well.
All of this is going on at the moment.
The company's spending billions on doing it and suddenly it's run into a crisis it wasn't expecting.
Theo Leggett rather nicely summing up the situation for us.
What now, though?
Where does it leave the company and where does it leave their many dealers and suppliers?
Richard Truitt is a Jaguar Land Rover reporter for Automotive News in the US, and Umesh Samani is chair of the Independent Motor Dealers Association in the UK.
And I asked Umesh how it's been affecting his business.
We use CarDealer and I also have a workshop as well.
So trying to get any information, trying to get parts from Jaguar and Land Rover dealers is almost impossible.
We spoke to a Land Rover dealer a couple of days ago, trying to get a potential mirror for one of our customers.
And the dealer just said, I can't give you any information.
I can't tell you how much the mirror is, when I can get one or anything like that.
They just could not access any information to help us at all.
I really felt sorry for the guy because he was saying he's almost twiddling his thumbs because they don't know what to do.
And they're not getting a lot of information from manufacturers either.
And I'm guessing, if you're a Jaguar owner or a Land Rover owner and you've got a car that's potentially broken and can't be driven, that's not really going to endear you to the company.
Well, it's almost an impossible situation, isn't it?
You know, as I say, the fact that if the car's broken down, I mean part of the IMDA dealers.
There's a couple of dealers who have told me again on our forums that they've got parts on order which have been delayed, but now they don't even know when they're going to get these parts.
So they've got cars sitting there, which could be weeks, it could be months.
Let's hope it's not years. before they can do anything with those cars.
So it's just dead stock sitting there, just waiting for bits.
And Richard looking at some of the dealers in the US.
I mean that uncertainty must be part of the problem here.
We've heard today from Jaguar Land Rover that they expect this disruption to go on for at least a couple of weeks more.
It's already had a very strong effect on the company.
I'm guessing people are just thinking, well, when is the end going to come?
Well, we're in better shape here than you are over there because we are the biggest market for JLR.
I did a little reporting earlier today and tried to find out what's the inventory situation like.
And I can tell you that Land Rover has 17,163 vehicles on the ground or in transit to dealers.
Jaguar has about 2,805.
So we've got plenty of vehicles here, but I believe that the parts situation is probably going to be critical.
It's not yet because through unipart jaguar, land rover has about five or six warehouses spread out throughout the country that are i don't know if they're filled with parts, but they've got parts now and dealers appear to be functioning as normal.
But i can tell you that there is one part of the business, very important part of the business, that is already suffering here, and land rover does a very big business with bespoke vehicles.
In other words, you walk into your, your Land Rover dealer and you order your Range Rover with special colours and materials and trims, and all that.
Not only are they not taking the orders for that, but they can't deliver any that are on order either.
In terms of the wider industry, Richard, this has affected a lot of knock-on companies.
We've talked about dealers, but also their suppliers as well.
Yes, I think that could be.
If the British government doesn't step in and help fund some of these, the long-term effects of that could be devastating, because it takes many, many years of sourcing and testing and engineering to bring a part up to mass production capabilities right.
And so if the company that makes door handles or sunroofs or switches for Jaguar Land Rover goes out of business, It's not like another new company can just step up overnight and supply those parts.
And Umesh as chairman of the Independent Motor Dealers Association.
If there are disruptions like this, do you think that's going to make people less inclined to deal with Jaguar Land Rover in the future?
For sure, absolutely.
I think, you know, if you think about it, Jaguar, Land Rover, they can't support the customers.
You know, if a customer's vehicle is off the road, that's off the road.
So what does the customer do?
They've got no help and support.
There's no courtesy cars being thrown out left, right and centre.
So the customer is going to be left thinking that the company is very negative, not being able to help them and support them in times of need.
So I think you know people start challenging themselves, saying do I really need to buy another Land Rover or a Jaguar if the manufacturer can't support us?
So i think this will be a very costly thing over here, definitely for sure, and i think also there's going to be many, many workshops struggling because they'll have cars again stuck there, customers with no vehicles and the.
You know.
The bigger picture is, of course, the supply chain uh, of all the parts, you know uh, all those people potentially may be losing jobs or even companies going bust because of cash flow situation.
I just want to ask you finally we're talking about the way that the motor industry is evolving, in particular, the rise of electric cars, but also the competition that we're seeing from China.
Looking at some of the customers that you see, is there a desire for electric cars and Chinese cars?
Is that what's going to knock some of Jaguar Land Rover's sales?
I think Jaguar will suffer from that.
Jaguar Land Rover, the JLR group, I think will suffer.
I think there's going to be loyal people who will stick to JLR.
But I think with the Chinese competition certainly the Chinese are coming over very strong in the UK.
They're capturing massive, massive markets of it.
And they're known for quality build, reliability, and of course, price point as well.
So people will start looking beyond the badge and start looking what is value for money.
And I think it's going to be good.
It's a big potential for the Chinese, 100%.
We have no Chinese brand vehicles on sale here.
That may have a lot to do with the current administration in Washington DC, but Chinese brands would not be viable here with tariffs and probably not a real good image.
Richard Truitt, there from Automotive News in the US, and Umesh Samani, chair of the Independent Motor Dealers Association in the US.
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We've been hearing what the US President Donald Trump's been saying at the UN General Assembly in New York.
In particular, some of his comments about the economy.
Under my leadership, energy costs are down.
Gasoline prices are down.
Grocery prices are down.
Mortgage rates are down.
And inflation has been defeated.
The only thing that's up is the stock market, which just hit a record high.
So, Quay, I mean, is that an accurate assessment?
Is people's confidence up or down?
Well, I would say that it's interesting because the economy is actually doing well and the stock market is doing well, as he pointed out.
And yet there's a lot of negativity, economic negativity across the U.S.
And I think you see that in a lot of the opinion polls that are coming through, from consumers, from workers.
And I think really, I think he does overstate that.
The impact of inflation.
You know yes, inflation is hovering just below 3, but it's not back to the 2.
That would make the Fed comfortable and that would make other people comfortable.
And at the same time, we're seeing a slowdown in the labor market.
And that, I think, is hitting a lot of confidence among the populace here.
We couldn't mention it without talking about tariffs, which also got a mention in President Trump's speech.
We've used tariffs as a defence mechanism under the Trump administration, including my first term, where hundreds of billions of dollars in tariffs were taken in.
And by the way, we had the lowest inflation and now we have very low inflation.
The only thing different is that we have hundreds of billions of dollars flowing into our country.
The attitude to tariffs has been an interesting, variable one, but this has been the defining, perhaps policy of the last few months.
Yes, absolutely.
I mean.
One thing that Trump has been consistent about over the last 30 years is his favor of trade restrictions, including tariffs.
But unfortunately having tariffs is not necessarily helpful to the inflation picture in the United States.
It's very interesting to pick over Quay.
Thank you very much for being with us.
Let's look at something a little more televisual, because Jimmy Kimmel Live was quite publicly cancelled by ABC after he was suspended for comments relating to the shooting of the conservative activist Charlie Kirk.
The show was then reinstated by the Disney-owned network.
However, a significant number of ABC-affiliated TV stations say that they're not going to show it, not least those owned by the media groups Sinclair and Nexstar.
This is a statement from Nexstar, who are one of the biggest owners of stations in the US.
They said constructive dialogue in the markets we serve, and Sinclair bosses have cited similar reasoning.
I'm joined by Bill Carter, who's a TV analyst and the author of The War for Late Night.
So Jimmy Kimmel sort of reinstated, but not in all places.
Can you just very briefly if possible, tell us a little bit about how the structure works here?
Because ABC run the network but they don't own and control all of the stations across the US that are showing ABC programming.
That's right.
They have their own stations, a group of stations, which are the biggest cities.
And then there are these large groups of station owners, mainly in smaller cities, a few big cities.
Washington's involved, certainly, with Sinclair, actually.
But essentially what happens is they are the ones that put the program on and they have a deal with the network where they actually pay the network for the programming.
And they have a contract to carry the network's programs, which may become an issue if this goes for a long term.
So individual stations, some of them have the ability to decide not to show a programme, and that's what's happened here.
And, as we mentioned, Sinclair and Nextar are sort of companies that own a lot of these individual stations.
Are these companies potentially just shooting themselves in the foot?
Because we don't live in a world where you have to watch your local TV station anymore.
If people want to watch this show, they will watch it and they'll find a different way to do it.
Absolutely.
That is exactly the case.
And it's not like it used to be where the affiliates really had some power here.
I think the network has most of the power.
If you're not affiliated with the network and you're a station, you have nothing now.
So I would think that this looks and feels to me like they're trying to make a statement about their unhappiness with what Jimmy said, and it will somewhat quickly resolve itself.
That's what I would expect.
So, given the risks in deciding not to show it, is there anything more behind their decision not to broadcast it?
Yes.
Both of them have pending business, very big business, that has to be passed on by the Trump administration, has to be accepted by the Trump administration.
Billions of dollars they have invested in adding to their station totals which they are prevented from adding to unless the government alters the regulations now.
So they are very much under the gun, depending on the government, to approve that.
And this all began with the commissioner of the Federal Communications Commission a Trump acolyte for sure going to Nexstar basically, and setting up this whole confrontation, because he knew that Nexstar would basically have to do what he wanted.
Not that Nexstar is opposed to this.
They are a conservative organization, Sinclair even more so.
But it's essentially doing the will of the Trump administration, specifically Trump, who hates Jimmy Kimmel.
There's a hugely divided audience in the US now if you look at the political divides across the country.
And whilst there'll be a lot of people who'll be critical of not being able to see this show, a lot of people will we should say will support this decision.
Yeah, it's interesting because in every market, even though these are smaller markets and maybe more conservative areas, there are plenty of viewers who would probably want to see Jimmy Kimmel, and vice versa in the big markets.
There are probably viewers who don't want to see Jimmy Kimmel, but they don't have to.
They can just turn it off or watch something else.
What really kicked this off into a national controversy was the idea that the government is trying to prevent the prior restraints sort of from – any availability of the show in these markets.
It's against the First Amendment to regulate speech.
And you could see from the blowback even from very conservative people like Ted Cruz and Mitch McConnell and the Wall Street Journal editorial page, all of whom said this is wrong.
The government should not be interfering with the business who wants to put on a program and has the right to do it and has the right to have a guy say what he wants to say and tell the jokes he wants to tell.
And just to look at the other side of it, there's a lot of pressure on well, the whole of the TV industry, but these late night shows in particular we've seen Stephen Colbert being cancelled in the last month or two.
But actually for Jimmy Kimmel, the publicity around this within the sort of people who would want to watch it this probably has not done him any ills at all.
No, he'll probably have an enormous audience for his show tonight.
And probably going forward.
He'll be celebrated by people who do want to stand by the First Amendment because, unlike the law firms that gave in and the universities that gave in to pressure from the Trump administration, Jimmy Kimmel did not.
He did not.
He could have said, oh, I'll go on the air and I'll apologize and everything will be fine.
That's not who he is.
He's a very tough-minded and principled guy.
And it turns out that Disney had to stand up as well and say we're not going to give in another piece of the puzzle in the very interesting changing market of the media in 2025.
Bill Carter, TV analyst and the author of The War for Late Night, thank you very much for being with us on World Business Report.
A reminder there's a lot more available on our website, bbccom slash news.
There's a lot about the Jaguar Land Rover story we mentioned, but also some of the news in a drop in Porsche's share prices connected to their AV rollout.
You can see that anytime you want and you can also go online to find this program as a podcast.
Thanks for being with us.
I'm Asma Khalid in Washington, D.C.
I'm Tristan Redman in London, and this is The Global Story.
Every weekday, we'll bring you a story from this intersection, where the world and America meet.
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