Nvidia’s AI Investment Surge: Dominating the Landscape with Multi-Billion Dollar Plays in Start-Ups, Accelerating AI Evolution in 2023!

Nvidia + AI

Main Points:

  • The world’s leading chipmaker, Nvidia, is making significant strides in AI investments, positioning itself as a major player in the rapidly evolving landscape of artificial intelligence.
  • Nvidia’s investments span across “more than two dozen” companies in 2023, covering a spectrum from large AI platforms valued in the billions to smaller start-ups applying AI in healthcare, energy, and other industries.
  • Dealroom estimates reveal that Nvidia participated in 35 AI-related deals in 2023, a substantial increase compared to the previous year. This positions Nvidia as the most active large-scale investor in AI, surpassing prominent venture firms like Andreessen Horowitz and Sequoia.
  • Mohamed Siddeek, head of Nvidia’s venture arm NVentures, emphasizes the company’s criteria for investment as “relevancy.” Nvidia prioritizes companies that heavily rely on its technology, whether through GPU chips or software, ensuring a strategic alignment with its core offerings.
  • Nvidia’s H100 GPU has become highly coveted in Silicon Valley, particularly for its role in accelerating the training of “large language models.” The chipmaker’s investments, totaling $872 million in nine months, reflect its commitment to staying at the forefront of AI technology and its influence on the market.

Nvidia, the world’s leading chipmaker, has emerged as a major investor in artificial intelligence (AI) start-ups in the current year, aiming to capitalize on its dominance in providing AI processors.

On Monday, Nvidia, headquartered in Silicon Valley, announced investments in “over two dozen” companies this year. These range from significant AI platforms valued in the billions to smaller start-ups applying AI in sectors like healthcare and energy.

Dealroom, a venture capital investment tracker, estimates that Nvidia has participated in 35 deals in 2023, a sixfold increase from the previous year. This establishes Nvidia as the most active large-scale investor in AI during a robust year for the sector, surpassing major venture firms like Andreessen Horowitz and Sequoia, as per Dealroom. This ranking excludes small-scale accelerator funds, such as Y Combinator, which place numerous smaller bets.

Nvidia‘s quarterly filings reveal investments totaling $872 million in “non-affiliates” during the nine months ending in October. This amount is over ten times the investment made in the same period last year.

Mohamed Siddeek, head of Nvidia’s venture arm NVentures, emphasizes the importance of relevancy as the primary criterion for start-up investments. He states, “Companies that use our technology, who depend on our technology, who build their businesses on our technology… I can’t think of a situation where we’ve invested in a company that did not use Nvidia products.”

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Nvidia’s portfolio, managed by NVentures and its corporate development team, includes companies like Inflection AI and Cohere, competitors to OpenAI, the creator of ChatGPT. Other investments include Hugging Face, valued at $4.5 billion, and CoreWeave, a cloud infrastructure company. The most recent investment was in Mistral, a Paris-based AI start-up valued at €2 billion.

All these companies share a commonality—they are Nvidia customers, utilizing either its GPU chips or software.

Nvidia’s H100 GPU has become highly sought-after in Silicon Valley, particularly for creators of “large language models” like ChatGPT, enabling faster system training compared to traditional server chips.

Nvidia invests from its balance sheet, writing checks in the tens of millions. NVentures aims to generate healthy returns, while the corporate development team may invest for more strategic purposes. The company both leads rounds and collaborates with venture capital firms.

Start-ups receiving investment from Nvidia often anticipate a closer relationship, recognizing Nvidia as a strategic partner for new chip rollouts. However, Nvidia denies seeking special terms with start-ups to ensure chip usage.

For instance, Inflection AI, part of a $1.3 billion fundraising round in June, claims access to 22,000 H100 GPUs through alliances with Nvidia and CoreWeave. Despite this, Nvidia denies offering preferential access to its chips, stating, “We don’t help anybody jump the queue.

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