$1 billion invested in 50 companies! In 2024, NVIDIA strongly supports AI startups
Most transactions are concentrated in "core AI" companies with high demand for computing infrastructure, some of which are also buyers of NVIDIA chips, including xAI, owned by Elon Musk, as well as well-known AI model providers such as OpenAI, Cohere, Mistral, and Perplexity
In 2024, the "top player" in the chip industry, NVIDIA, invested $1 billion in 50 AI startups.
Most of the deals are concentrated in "core AI" companies with high demand for computing infrastructure, some of which are also buyers of NVIDIA chips, including Elon Musk's xAI, as well as well-known AI model providers like OpenAI, Cohere, Mistral, and Perplexity.
Company documents and research from Dealroom show that NVIDIA's investments in 2024 have seen significant growth compared to 39 rounds of financing and $872 million in spending in 2023.
The increase in NVIDIA's investments is attributed to its $9 billion cash reserve, with its GPUs becoming one of the hottest commodities globally. In 2024, NVIDIA's stock price rose over 170%, helping to propel the S&P 500 index to its best two-year performance of the century.
Analysts believe that NVIDIA is leveraging its massive market capitalization and substantial cash flow to sustain the survival of buyers. Nate Koppikar from short-seller Orso Partners stated:
"If Applied Digital goes bankrupt, it would mean (a large amount of) sales would disappear."
NVIDIA's Ambitions Soar! Surge in Investment Amount and Quantity in 2024
In 2024, NVIDIA's investments include strategic investments in Elon Musk's xAI, as well as investments in well-known AI model providers like OpenAI, Cohere, Mistral, and Perplexity. Additionally, NVIDIA's startup incubator, Inception, has supported the early development of thousands of startups.
Recently, NVIDIA also completed the acquisition of the Israeli AI workload management platform Run:ai and obtained approval from the EU antitrust regulatory authority.
NVIDIA's investment scope is broad, covering multiple AI application areas such as medical technology, search engines, gaming, drones, chips, traffic management, logistics, data storage and generation, natural language processing, and humanoid robots. Its portfolio includes startups whose valuations have soared to billions of dollars, such as CoreWeave and Applied Digital.
Notably, some of NVIDIA's major clients, such as Microsoft, Amazon, and Google, are actively developing their own custom chips to reduce reliance on NVIDIA GPUs. This could make smaller AI companies a more important source of revenue for NVIDIA in the future.
NVIDIA's frequent trading activities have raised concerns about its influence in the AI industry, especially against the backdrop of antitrust scrutiny in the U.S. and Europe. Former U.S. Federal Trade Commission Chairman Bill Kovacic stated that competition regulators are closely monitoring this behavior of "dominant companies making large-scale investments." However, NVIDIA strongly denies linking funding to the requirements of using its technology. The company stated:
"We are working to develop our ecosystem, support outstanding companies, and enhance our platform. We compete and win based on our strengths, which is unrelated to any of our investments."