Nvidia Emerges as Leading Investor in AI Companies

Nvidia, the world's most valuable chipmaker, has become one of the most prolific investors in AI start-ups this year, seeking to capitalise on its position as the dominant provider of AI processors. From a report: Silicon Valley-based Nvidia said on Monday it had invested in "more than two dozen" companies this year, from big new AI platforms valued in the billions of dollars to smaller start-ups applying AI to industries such as healthcare or energy. According to estimates by Dealroom, which tracks venture capital investments, Nvidia participated in 35 deals in 2023, almost six times more than last year.

That made the chipmaker the most active large-scale investor in AI in a banner year for dealmaking in the sector, outstripping Silicon Valley's largest venture firms such as Andreessen Horowitz and Sequoia, according to Dealroom, excluding small-scale accelerator funds such as Y Combinator that place many smaller bets. "Broadly, for Nvidia, the number one criteria [for making start-up investments] is relevancy," Mohamed Siddeek, head of its dedicated venture arm NVentures, told the Financial Times. "Companies that use our technology, who depend on our technology, who build their businesses on our technologyâ...âI can't think of a situation where we've invested in a company that did not use Nvidia products."

Shovel maker investing in mining companies

[xack]

Nvidia is built on cryptomining and Nazi incels wanting ai wifes, it even stopped refering to itself as a gpu manufacturer. We will see Nvidia in trouble eventually, and the ai bubble burst will see more cell mates with SBF and CZ. Nvidia even admitted making devices designed to evade sanctions.

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[Anonymous Coward]

Did Jensen slept with your wife or something? Nvidia will fail as a company one day, but you seem very...troubled by Nvidia's existence.

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[ShanghaiBill]

Nvidia will fail as a company one day

Nvidia's market value (PE=114) may fall to Earth, but that isn't the same as "failing". The company will continue to do what they're doing now.

Investing in AI companies is a smart move. They are cutting deals for stock in exchange for full-price products. Since Nvidia has 70% gross margins, they are buying shares for 30% of what a normal investor would pay.

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[buck-yar]

LLMs are mostly garbage but that one piece of software, DeepFaceLab, that does all the face swapping, that looks legit. But can Nvidia be pushed along by one piece of software (as cool as it is)?

Hang on! Let me be sure I understand this.

[nightflameauto]

So you're saying the company making most of the profits off of the AI craze because their chips are being used for nearly all of it is investing heavily in promoting AI companies?

I feel like this is so logical as to defy belief that it needs to be pointed out. This is the duh of the week right here.

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[quantaman]

If they're a large enough investor in these companies, it'll be that much harder for their customers to switch if/when competitors commoditze matrix-multiply-hardware.

There's a slightly less underhanded version of that.

These startups are their canary in the coalmine. If a competitor starts edging into the AI market these companies will be among the early adopters. Seeing why folks are switching will help them react before it's too late.

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[Xylantiel]

It does seem a bit circular doesn't it though? NVIDIA "invests" a bunch of money in AI startups, who then buy a bunch of their chips. Then NVIDIA points out how many of their chips are being purchased for AI.

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[buck-yar]

The LLM hype will diminish, and they will make models more efficient and not need 14gb. Nvidia needs more software that requires their horsepower. Other than LLMs and that face swap software, what needs that level of computing? How many more H100's can they sell to data centers? AI feels like its losing inertia. People tried ChatGPT and were probably disappointed when it sounds like a souped up search engine. How long before companies throw in the towel when the AI hallucinates and says something offensive

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[jmccue]

To me this could be good. When the AI Bubble breaks, Nvidia may go down with them. Then maybe they will open up their GPUs to attempt to recover. One can hope :)

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[nightflameauto]

To me this could be good. When the AI Bubble breaks, Nvidia may go down with them. Then maybe they will open up their GPUs to attempt to recover. One can hope :)

Your lips to the gods of capitalism's ears.

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[Deal In One]

Probably also helps nvidia to keep a close eye on the needs of "AI" companies so that it can design / produce products better suited to their needs.

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[coofercat]

It's also a case of "eggs in one basket" - if the bottom falls out of "AI", then they lose on their investments AND on their chip making.

My personal view is that it'll work for several years, but someone will come up with a new chip design for AI workloads which nvidia won't make (at least, not at first). [Side note: the current nvidia CEO will likely leave around now ;-)] Those startups that they're investing in will be pressured not to buy the new chips and keep buying nvidia. They'll lose competitive adv

What was the investment?

[kid_wonder]

Cold hard cash? OK I accept that number.
My guess though is that they are "investing" by handing out their cards for free, or at a discount (which btw would also explain their "shortage"). If so, then I would imagine they are inflating their number by valuing those at retail price.

Investing in early stage companies using their pro

[francisew]

Investing in early stage companies using their product is incredibly logical. They're well placed to evaluate the likelihood of success for their investments, and they can help to nurture the nascent technologies which use ML acceleration hardware. This gives NVIDIA deep insight into how their tech ecosystem should be evolved, and enables use cases that should bring other players in these industries from hardware platforms like x86 and arm/risc to GPU accelerated hardware platforms, growing their core marke