<\/p>\n
Jensen Huang speaking at the ‘Nvidia GTC’ meeting at the 2025 VivaTech conference in Paris in June.<\/p>\n
(Bloomberg) — Nvidia Corp. has gradually become one of the most important players in the venture capital world, without being a VC firm.<\/p>\n
Most Read from Bloomberg<\/p>\n
The chipmaker said last month that it\u2019s planning to\u00a0invest $100 billion in OpenAI \u2014\u00a0a deal that would mark the largest startup investment of all time.\u00a0It\u2019s part of a\u00a0growing string of bets on private artificial intelligence companies Nvidia has made across the\u00a0world. At the company\u2019s highly anticipated GTC event\u00a0in Washington on Tuesday, Nvidia Chief Executive Officer Jensen Huang called out a number of private companies that his company’s taken stakes in by name, including the AI firm Perplexity, the Chinese autonomous vehicle company WeRide and the robotics startup Figure AI. He shouted out to several of their executives sitting in the audience.<\/p>\n
\u201cI’m delighted that AI startups build on Nvidia,\u201d Chief Executive Officer Jensen Huang said during his keynote speech at the GTC conference on Tuesday. \u201cThey do so for several reasons. One: Of course, our ecosystem is rich. Our tools work great.\u201d<\/p>\n
This year the\u00a0chipmaker has\u00a0backed 59 AI startups as of mid-October, and at least 10 in just the last two months, according to PitchBook data. That\u2019s already more than the 55 investments that Nvidia made in all of 2024, and a significant\u00a0leap from the 12 it made in 2022.\u00a0And it has plenty of capital to keep the bets coming: On Wednesday, Nvidia became the world’s first company to achieve a $5 trillion market capitalization, surpassing the economies of entire countries.<\/p>\n
The strategy, according to Huang, is to support the broader AI ecosystem. So far, Nvidia has been the largest recipient of the massive surge in spending on AI infrastructure.\u00a0For that to continue, analysts say, it needs AI adoption to take off in the broader economy, buoyed by a slew of new\u00a0uses pioneered by startups. \u201cMany of these start-ups are now starting to create even more ways to enjoy our GPUs,\u201d Huang said, referring to the chips central to AI capabilities. By becoming a\u00a0supporter of AI upstarts, Nvidia is following a standard pattern for corporate venture arms \u2014\u00a0but doing it at a faster rate with much higher stakes.<\/p>\n
\u201cClearly for Nvidia, as this stuff gets built out, they want it built out on their technology,\u201d Bernstein analyst Stacy Rasgon said. \u201cOnce you get entrenched, it\u2019s much more difficult for competitors to come in and take it away.\u201d<\/p>\n
Huang has also stressed that he doesn\u2019t believe that the AI industry is in a bubble, as his company piles more resources into the sector. \u201cNvidia\u2019s just making a bet that this will turn profitable, as many others are,\u201d Rasgon said.<\/p>\n
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In addition to its big bet on OpenAI, Nvidia has backed a diverse range of AI companies\u00a0large and small. Those include Reflection AI, which builds autonomous coding agents, Reka AI, which makes models that analyze videos, and Perplexity AI, an AI-powered search engine that aims to unseat Google.<\/p>\n
The investments can be helpful for startups both because of the capital as well as access to Nvidia\u2019s leadership\u00a0and coveted computing resources.\u00a0In a meeting with Nvidia executives, Perplexity Chief Executive Officer Aravind Srinivas asked for technical resources to help a product demo run more smoothly, he\u00a0told Bloomberg last year. Huang instructed someone to grant the request, and Perplexity had what it needed within a half hour, Srinivas said.<\/p>\n
\u201cI\u2019ve made requests of this nature of other CEOs, and usually it\u2019s routed through the next director or VP, and then they take another meeting to understand your use case better,\u201d\u00a0Srinivas said. \u201cWith Jensen \u2014 boom, boom, it\u2019s done.\u201d<\/p>\n
Some of the startups\u2019\u00a0cash will go toward buying Nvidia\u2019s advanced chips, which are essential for training cutting-edge AI models. Each chip retails for tens of thousands of dollars, and while companies have different computing needs, most aim to stock up on thousands of processors. Nvidia does not require its funding to go toward buying its products, but they\u2019re often one of a startup\u2019s top expenses.<\/p>\n
Reka, for example, secured $110 million in a funding round this year\u00a0backed by Nvidia. Some of that money will go toward\u00a0paying for processing power, said CEO Dani Yogatama. The company is also part of Nvidia\u2019s Inception program, which guides AI startups through Nvidia\u2019s platform and promises close cooperation with the chipmaker. Yogatama said that access to Nvidia\u2019s engineers and distribution network was a game-changer as Reka looks to expand its customer base and develop its product.<\/p>\n
\u201cA company like Nvidia has a lot of visibility all over the world, and it can help distribute our technology,\u201d Yogatama said. \u201cA small company like ours, we can make the best technology, but if no one uses it, it won\u2019t be helpful.\u201d<\/p>\n
Nvidia has found itself in a unique position: dominating the advanced chip market has helped expand the business, and\u00a0soaring sales\u00a0have\u00a0led to a lot of free cash flow. \u201cNvidia is going to have more cash than it knows what to do with,\u201d Morningstar analyst Brian Colello said.<\/p>\n
The company \u201cis also likely not in a position where a lot of its deals will be approved by the FTC,\u201d\u00a0Colello said, referring to the US Federal Trade Commission. \u201cSo I tend to think that smaller deals make more sense for the business at this point.\u201d<\/p>\n
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Betting on startups could also eventually help the company diversify its customer base, which is disproportionately made up of the biggest tech companies.<\/p>\n
Nvidia has five customers that make up nearly 50% of its revenue: the four major hyperscalers \u2014\u00a0Microsoft Corp., Meta Platforms Inc., Amazon.com Inc. and Alphabet Inc. \u2014\u00a0who fill their data centers with Nvidia\u2019s chips; and Super Micro Computer Inc., which fills its server racks with Nvidia\u2019s chips before they\u2019re placed in data centers. Nvidia can also count OpenAI as one of its biggest customers, although the company is still unprofitable, despite its promises to spend trillions on AI infrastructure.<\/p>\n
At the same time, many large companies are working to lessen their reliance on Nvidia\u2019s chips. OpenAI inked a partnership on Oct. 6 with Nvidia rival Advanced Micro Devices Inc., and plans to deploy tens of billions of dollars\u2019 worth of its chips. The following week, OpenAI also agreed to buy custom chips from Broadcom Inc. to power the ChatGPT-maker\u2019s artificial intelligence services. Google has also developed its own chips with Broadcom, allowing the Gemini maker to cut costs.<\/p>\n
Long term, Nvidia\u2019s bets on AI companies signal\u00a0an optimism about the future of the industry, despite some analysts\u2019\u00a0concerns about the circular nature of the AI ecosystem.\u00a0The recent wave of deals and partnerships involving Nvidia and a small\u00a0handful other key AI players have escalated\u00a0fears that an increasingly complex and interconnected web of business transactions is artificially propping up the trillion-dollar AI boom.<\/p>\n
But Huang has said\u00a0he thinks the industry is still poised for huge growth.\u00a0\u201cWe\u2019ve made some really terrific investments,\u201d\u00a0the CEO said on CNBC this month. \u201cLargely, my only regret is that we didn\u2019t invest more.\u201d<\/p>\n
–With assistance from Joshua Brustein and Ian King.<\/p>\n
(Adds detail from Nvidia\u2019s event in Washington starting in second paragraph)<\/p>\n
Most Read from Bloomberg Businessweek<\/p>\n
\u00a92025 Bloomberg L.P.<\/p>\n","protected":false},"excerpt":{"rendered":"Jensen Huang speaking at the ‘Nvidia GTC’ meeting at the 2025 VivaTech conference in Paris in June. (Bloomberg)…\n","protected":false},"author":2,"featured_media":260294,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[45],"tags":[182,29830,181,507,11637,3426,11379,140607,12741,74],"class_list":["post-260293","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-ai-startups","tag-artificial-intelligence","tag-artificialintelligence","tag-chief-executive-officer","tag-company","tag-jensen-huang","tag-nvidia-gtc","tag-perplexity","tag-technology"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/260293","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=260293"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/260293\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/260294"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=260293"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=260293"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=260293"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}