{"id":916689,"date":"2026-11-14T03:42:09","date_gmt":"2026-11-14T03:42:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/916689\/"},"modified":"2026-11-14T03:42:09","modified_gmt":"2026-11-14T03:42:09","slug":"jensen-huangs-departure-blasts-big-hole-in-ai-startup-funding-vcs-and-founders-say","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/916689\/","title":{"rendered":"Jensen Huang\u2019s departure blasts big hole in AI startup funding, VCs and founders say"},"content":{"rendered":"

It was the resignation heard across the world. Jensen Huang, Nvidia\u2019s embattled CEO<\/a> who co-founded and led the company for 33 years, had officially stepped down<\/a>. \u201cIt\u2019s like a bomb went off,\u201d one neocloud founder told TechCrunch when he first heard the news.\u00a0<\/p>\n

Over the last several years, Nvidia has been a prolific investor<\/a>, pouring tens of billions into startups annually and participating in 105 rounds this year alone, often as the largest investor, according to PitchBook. \u201cIf that direction changes, it\u2019ll be a big blow to so many young companies,\u201d said Maria Davidson, founder of Relational Capital.\u00a0<\/p>\n

Huang\u2019s absence leaves the startup ecosystem without one of its biggest champions and with far less capital for now, investors say, which could have a massive impact on dealmaking, valuations, funding, and even competition. <\/p>\n

\u201cNvidia is carrying almost every AI-native startup from application to neocloud,\u201d Dawn Capital\u2019s Shamillah Bankiya told TechCrunch.\u00a0<\/p>\n

Most of the significant decisions to invest in startups often came from Jensen himself, according to Umesh Padval, managing partner at Seligman Ventures. Padval has known Huang since serving on the board of Mellanox Technologies, a networking chipmaker Nvidia acquired for approximately $7 billion in 2020. While there is hope that Huang\u2019s eventual successor will resume his dealmaking spree, investors aren\u2019t hopeful that it will happen in the short term.\u00a0<\/p>\n

Nvidia\u2019s interim CEO, Colette Kress, is expected to institute some changes<\/a>, especially when it comes to Nvidia\u2019s investments into AI startups at the crux of the billion-dollar data center build-out<\/a>. Huang\u2019s rampant dealmaking in this sphere has been a source of concern for Wall Street.<\/p>\n

\u201cShe\u2019s much more conservative,\u201d one investor said of Kress. \u201cI don\u2019t think she\u2019s going to commit the same amount of money to keep the early-stage ecosystem going.\u201d\u00a0<\/p>\n

Nvidia\u2019s biggest bets were backing neoclouds, inference providers, and open weight models, which are expensive for smaller companies to build.\u00a0\u201cJensen\u2019s initiatives are a big reason an ecosystem has emerged despite that,\u201d Zain Javaid, co-founder of the hardware company Ghost, said.<\/p>\n

For instance, Nvidia backed CoreWeave when it was still private and participated in two of Crusoe\u2019s rounds, including its $1.4 billion Series E. It bought Hugging Face this year for $13 billion<\/a> (expected to close in 2027) and holds investments in Mistral AI, Lambda, and Black Forest Labs. Nvidia was often the largest investor in the deals. Last year, it wrote an $800 million check into a $2 billion Series B round for Reflection AI, before the open source startup began to earn meaningful revenue, according to the Wall Street Journal<\/a>.\u00a0<\/p>\n

\u201cJensen believed in open source and frankly speaking, Europe,\u201d Bankiya said of how Huang invested so much in AI across the world. The cease of that support in other regions outside of America, like Europe \u201cwould be a massive funding and honestly ecosystem gap that no one can fill.\u201d\u00a0<\/p>\n

It\u2019s also true that Nvidia was such a dominant player in the ecosystem that at times, it felt like a monopoly. By backing so many companies with such generous checks, Nvidia effectively locked those startups into using its chips, which helped reinforce its dominant market position.<\/p>\n

If the company does grow more conservative with its startup investments, that could leave more room for rivals and smaller competitors. (Coincidentally, Google announced two new chips<\/a> this week amid Huang\u2019s Nvidia fallout.)\u00a0\u00a0<\/p>\n

Some investors with whom TechCrunch spoke hope that large cloud companies and other chipmakers will step in to back startups and fill some of the void that will likely be left by Huang.\u00a0<\/p>\n

Dharmesh Thakker, a general partner at Battery Ventures, for example, expects Big Tech rivals to vie for Nvidia\u2019s investment crown, \u201cdepending upon who brings the best combination of a great product, an ecosystem and community to compete with CUDA, and the financial power to bankroll the ecosystem,\u201d he said. CUDA is Nvidia\u2019s software platform that enables developers to run AI models on its GPUs.\u00a0<\/p>\n

While companies like Google, Amazon, Microsoft, and AMD may back mature startups to drive adoption of their chips and clouds, Thakker doubts they will pour hundreds of millions into pre-revenue infrastructure startups the way Nvidia did.<\/p>\n

Under Huang, infrastructure companies that needed $100 million to $500 million in GPUs would often raise half of that amount at valuations of $1 billion or more from Nvidia just to get started, one VC said. The chipmaker\u2019s participation gave other investors the comfort in backing these companies at the lofty valuations. <\/p>\n

Now Nvidia is expected to be more selective in the new companies it backs, while writing smaller-sized checks into its existing portfolio, contributing to a drop in valuations.\u00a0<\/p>\n

\u201cWhen Nvidia was on the cap table, everyone felt safe,\u201d Padval said. Without that backing, investors say traditional VCs are likely to think twice before writing checks into these startups and may even pause certain dealmaking.<\/p>\n

Even so, few believe that Nvidia\u2019s investment slowdown will by itself halt the broader AI boom.<\/p>\n

Though everyone agrees that Huang is a massive loss for Nvidia, one of his ex-employees, Amulya Vishwanath, who now runs her own VC fund, said that \u201cfounders and leaders must be held accountable,\u201d and that the ecosystem is bigger than one person. \u201cThat talent will, and must, continue to thrive.\u201d\u00a0<\/p>\n

When you purchase through links in our articles, we may earn a small commission<\/a>. This doesn\u2019t affect our editorial independence.<\/p>\n","protected":false},"excerpt":{"rendered":"It was the resignation heard across the world. Jensen Huang, Nvidia\u2019s embattled CEO who co-founded and led the…\n","protected":false},"author":2,"featured_media":916690,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[45],"tags":[182,181,507,11379,317389,4321,10370,74],"class_list":["post-916689","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-jensen-huang","tag-neocloud","tag-nvidia","tag-open-source","tag-technology"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/916689","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=916689"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/916689\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/916690"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=916689"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=916689"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=916689"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}