Nvidia’s Ascent: Fueling the AI Revolution Through Strategic Investments
Nvidia’s rise to prominence in the artificial intelligence landscape is nothing short of meteoric. The company, once primarily known for its graphics processing units (GPUs), has become a central player in the AI revolution, with its technology underpinning many of the most significant advancements in the field. This transformation has been fueled by a surge in demand for Nvidia’s high-performance GPUs, which are ideally suited for the computationally intensive tasks required by AI algorithms. As a result, Nvidia has experienced a significant increase in revenue, profitability, and cash reserves, particularly since the advent of ChatGPT and the subsequent proliferation of generative AI services. This financial strength has enabled Nvidia to embark on a strategic investment spree, backing numerous startups that are pushing the boundaries of AI innovation.
A Deluge of Deals: Nvidia’s Expanding Investment Portfolio
Nvidia’s investment activity has dramatically increased in recent years, reflecting the company’s commitment to fostering the growth of the broader AI ecosystem. The numbers paint a vivid picture of this expansion. According to PitchBook data, Nvidia participated in 49 funding rounds for AI companies in 2024, a considerable jump from 34 in 2023. This surge is even more striking when compared to the preceding four years combined, during which Nvidia funded only 38 AI deals. These figures exclude investments made by NVentures, Nvidia’s formal corporate venture capital fund, which has also significantly ramped up its activity, engaging in 24 deals in 2024 compared to a mere 2 in 2022.
Nvidia’s corporate investing strategy is guided by a clear objective: to support startups that are considered “game changers and market makers,” thereby expanding the overall AI ecosystem. The company’s investments span a wide range of AI applications, from foundational technologies like large language models to more specialized areas like autonomous driving and robotics.
The Billion-Dollar Club: Backing AI’s Titans
Some of Nvidia’s most significant investments have been in companies that are at the forefront of the AI revolution, raising rounds that surpass the billion-dollar mark. These investments underscore Nvidia’s commitment to supporting the development of groundbreaking AI technologies and platforms.
OpenAI: Nvidia’s investment in OpenAI, the creator of ChatGPT, marked a significant milestone. In October, Nvidia reportedly contributed $100 million to a massive $6.6 billion round that valued OpenAI at a staggering $157 billion. While Nvidia’s investment was substantial, it was dwarfed by other backers, notably Thrive, which invested a reported $1.3 billion. This investment highlights Nvidia’s early recognition of OpenAI’s potential and its willingness to support a company that would become a defining force in the generative AI space.
xAI: Elon Musk’s xAI also secured Nvidia’s backing, with the chipmaker participating in a $6 billion round. This investment highlighted an interesting dynamic in the AI landscape, revealing that not all of OpenAI’s investors adhered to its request to refrain from backing direct competitors. After investing in OpenAI in October, Nvidia joined xAI’s cap table just a few months later. This move demonstrates Nvidia’s strategy of supporting multiple players in the competitive AI landscape, ensuring it has a stake in various approaches to AI development.
Inflection: Nvidia’s investment in Inflection, a company founded by DeepMind co-founder Mustafa Suleyman, had a unique trajectory. In June 2023, Nvidia co-led Inflection’s $1.3 billion round. However, less than a year later, Microsoft hired Inflection AI’s founders, acquiring a non-exclusive technology license for $620 million. This move left Inflection with a smaller workforce and a less certain future. This situation illustrates the dynamic and sometimes unpredictable nature of the AI industry, where talent and technology can shift rapidly.
Wayve: The U.K.-based startup, focused on developing a self-learning system for autonomous driving, received a significant boost from Nvidia. In May, Nvidia participated in a $1.05 billion round for Wayve, which is currently testing its vehicles in the U.K. and the San Francisco Bay Area. This investment reflects Nvidia’s long-standing interest in autonomous driving and its belief in the potential of AI to revolutionize transportation.
Scale AI: Nvidia joined forces with tech giants Amazon and Meta, along with Accel, to invest $1 billion in Scale AI in May 2024. Scale AI specializes in providing data-labeling services, a crucial component for training AI models. This investment valued the San Francisco-based company at nearly $14 billion. This investment underscores the importance of high-quality data in AI development and Nvidia’s recognition of Scale AI’s role in providing this essential service.
The Hundreds-of-Millions Club: A Broad Spectrum of AI Innovation
Beyond the billion-dollar rounds, Nvidia has also made substantial investments in a diverse range of companies, each contributing to different facets of the AI landscape. These investments demonstrate Nvidia’s commitment to supporting a wide array of AI applications and technologies.
Crusoe: This startup is building data centers and secured $686 million in late November, according to an SEC filing. Founders Fund led the investment, with Nvidia joining a long list of other investors. This highlights the growing need for infrastructure to support the increasing demands of AI computation.
Figure AI: In February 2024, Figure AI, a robotics startup, raised a $675 million Series B round. Nvidia, along with the OpenAI Startup Fund, Microsoft, and others, participated in the round, which valued the company at $2.6 billion. This investment showcases Nvidia’s interest in the intersection of AI and robotics, a field with significant potential for future growth.
Mistral AI: Nvidia’s investment in Mistral AI, a French-based large language model developer, marked its second commitment to the company. In June, Mistral AI raised a $640 million Series B round at a $6 billion valuation, with Nvidia’s continued support. This demonstrates Nvidia’s support for the development of large language models outside of the United States, fostering a more global AI ecosystem.
Lambda: Lambda, an AI cloud provider offering services for model training, secured a $480 million Series D round in February, reportedly valuing the company at $2.5 billion. SGW and Andra Capital co-led the round, with Nvidia, ARK Invest, and others joining. A significant portion of Lambda’s business revolves around renting servers powered by Nvidia’s GPUs. This investment directly benefits Nvidia by increasing the demand for its core product, GPUs, while also supporting the broader AI cloud infrastructure.
Cohere: Nvidia’s investment in Cohere, a large language model provider catering to enterprises, reached $500 million in June. This marked the chipmaker’s second investment in the Toronto-based startup, having first backed it in 2023. This reinforces Nvidia’s commitment to supporting various approaches to large language model development, including those focused on enterprise applications.
Perplexity: Nvidia’s commitment to Perplexity, an AI search engine startup, has been consistent. After initially investing in November 2023, Nvidia has participated in every subsequent funding round, including a $500 million round in December, which valued the company at $9 billion, according to PitchBook data. This shows Nvidia’s belief in the potential of AI to disrupt traditional search engines and provide more intuitive and informative search experiences.
Poolside: In October, Poolside, an AI coding assistant startup, announced a $500 million funding round led by Bain Capital Ventures. Nvidia participated in the round, which valued the AI startup at $3 billion. This investment reflects the growing interest in AI-powered tools that can assist software developers and increase their productivity.
CoreWeave: Nvidia’s investment in CoreWeave, an AI cloud computing provider, dates back to April 2023, when CoreWeave raised $221 million. Since then, CoreWeave’s valuation has soared from approximately $2 billion to $19 billion, and the company has filed for an IPO. CoreWeave’s business model centers on allowing customers to rent Nvidia GPUs on an hourly basis. This is another example of Nvidia investing in companies that directly drive demand for its GPUs, creating a synergistic relationship.
Together AI: In February, Nvidia participated in the $305 million Series B round of Together AI, a company providing cloud-based infrastructure for building AI models. The round, co-led by Prosperity7 (a Saudi Arabian venture firm) and General Catalyst, valued Together AI at $3.3 billion. Nvidia had previously backed the company in 2023. This investment supports the development of platforms that make it easier for developers to build and deploy AI models, further accelerating AI innovation.
Sakana AI: Nvidia’s investment in Sakana AI, a Japan-based startup, reflects its interest in innovative approaches to AI model training. In September, Nvidia invested in Sakana AI, which focuses on training low-cost generative AI models using small datasets. The startup raised a substantial Series A round of approximately $214 million, valuing it at $1.5 billion. This investment highlights Nvidia’s support for research into more efficient and cost-effective AI training methods.
Imbue: Imbue, an AI research lab focused on developing AI systems capable of reasoning and coding, secured a $200 million round in September 2023. Investors included Nvidia, Astera Institute, and former Cruise CEO Kyle Vogt. This investment supports fundamental AI research aimed at creating more sophisticated and capable AI systems.
Waabi: The autonomous trucking startup Waabi raised a $200 million Series B round in June, co-led by existing investors Uber and Khosla Ventures. Other investors included Nvidia, Volvo Group Venture Capital, and Porsche Automobil Holding SE. This further solidifies Nvidia’s commitment to the autonomous vehicle sector, specifically focusing on the trucking industry.
Deals Exceeding $100 Million: A Glimpse into the Future of AI
Nvidia’s investments extend beyond the mega-rounds, encompassing a range of companies that are developing innovative technologies with the potential to shape the future of AI. These investments, exceeding $100 million, highlight Nvidia’s commitment to supporting a diverse and dynamic AI ecosystem.
Ayar Labs: In December, Nvidia invested in Ayar Labs’ $155 million round. Ayar Labs is developing optical interconnects designed to improve AI compute and power efficiency. This marked Nvidia’s third investment in the startup. This investment focuses on improving the underlying hardware infrastructure for AI, addressing the challenges of data transfer and power consumption in large-scale AI systems.
Kore.ai: This startup, focused on developing enterprise-focused AI chatbots, raised $150 million in December 2023. Nvidia participated in the funding, alongside FTV Capital, Vistara Growth, and Sweetwater Private Equity. This investment supports the development of AI-powered conversational agents for business applications, improving customer service and streamlining workflows.
Hippocratic AI: Hippocratic AI, a startup developing large language models for healthcare, announced a $141 million Series B round in January, valuing the company at $1.64 billion. Kleiner Perkins led the round, with Nvidia participating alongside returning investors Andreessen Horowitz, General Catalyst, and others. The company’s AI solutions are designed to handle non-diagnostic patient-facing tasks, such as pre-operating procedures, remote patient monitoring, and appointment preparation. This investment demonstrates Nvidia’s interest in applying AI to the healthcare sector, a field with significant potential for improving patient care and outcomes.
Weka: In May, Nvidia invested in a $140 million round for Weka, an AI-native data management platform. The round valued the Silicon Valley company at $1.6 billion. This investment supports the development of data management solutions specifically designed for the needs of AI workloads, addressing the challenges of storing, accessing, and processing massive datasets.
Runway: In June 2023, Runway, a startup building generative AI tools for multimedia content creators, raised a $141 million Series C extension. Investors included Nvidia, Google, and Salesforce. This investment supports the development of AI-powered tools that can assist artists, designers, and other creatives in generating and manipulating multimedia content.
Bright Machines: In June 2024, Nvidia participated in a $126 million Series C of Bright Machines, a smart robotics and AI-driven software startup. This investment supports the development of intelligent automation solutions for manufacturing, combining robotics and AI to improve efficiency and productivity.
Enfabrica: In September 2023, Nvidia invested in networking chips designer Enfabrica’s $125 million Series B. Although the startup raised another $115 million in November, Nvidia didn’t participate in the round. This investment, similar to Ayar Labs, focuses on improving the networking infrastructure for AI, enabling faster and more efficient communication between AI processors.
Nvidia’s strategic investments are not merely financial transactions; they represent a calculated effort to shape the trajectory of the AI revolution. By backing a diverse range of companies, from established players to emerging startups, Nvidia is fostering an ecosystem that is driving innovation across various sectors. These investments are a testament to Nvidia’s vision of a future powered by AI, a future where its technology plays a central role in shaping the world around us. The company’s commitment to supporting “game changers and market makers” underscores its belief in the transformative potential of AI and its dedication to accelerating its development. As AI continues to evolve, Nvidia’s strategic investments will undoubtedly play a crucial role in defining the next chapter of this technological revolution. The breadth and depth of these investments demonstrate a clear strategy: to not only benefit from the AI boom but to actively cultivate and direct it. By investing in infrastructure, foundational models, and specialized applications, Nvidia is positioning itself as the indispensable backbone of the AI-powered future.