Nvidia has invested $1 billion in AI deals by 2024

By 2024, NVIDIA has invested $1 billion in artificial intelligence companies, as it is seen as a crucial support for startups trying to get the AI ​​revolution from the big tech group’s chips powering it.

The semiconductor giant, which had a market capitalization of more than $3tn in June, has spent more than ever on customers in the growing sector, fueled by strong demand for high-performance graphics processing units (GPUs).

such as corporate documents and Dealroom research; Nivea In the year It spent a total of $1 billion in 50 startup funding rounds and multiple corporate deals in 2024, compared to 2023, which saw 39 startup rounds and $872 million spent.

Most of the agreements were with “Core AI” companies with high computing infrastructure needs, and therefore in some cases were also buyers of its own chips.

Tech companies have spent tens of billions of dollars on Nvidia chips in the past year, since chatGPT’s launch two years ago, sparking an unprecedented investment boom. AI.

Nvidia’s move comes after amassing a $9 billion war chest as its GPUs are among the world’s best-selling products.

In the year The company’s shares are up more than 170 percent in 2024, as it and other tech companies have helped the S&P 500 index to a strong finish. The best two-year run of this century.

In the first nine months of last year, Nvidia’s $1bn worth of investments in “unaffiliated entities” includes the company’s and corporate investments. According to company filings, that sum is 15 percent higher than it was in 2023 and 10 times more than it invested in 2022.

Some of Nvidia’s biggest customers, such as Microsoft, Amazon and Google, are actively working to reduce their reliance on GPUs by developing their own custom chips. Such development could make small AI companies an even more important source of revenue for Nvidia in the future.

“Nowadays, Nvidia wants more competition and it makes sense to have these new players in the mix,” said the fund manager, who has stakes in several of the companies he invests in.

In the year By 2024, Nvidia has done more deals than Microsoft and Amazon, although Google is still more active, according to Dealroom.

Nvidia’s control over the AI ​​industry has raised concerns at a time when it is facing heightened antitrust scrutiny in the US, Europe and China.

Bill Kovacic, former chairman of the US Federal Trade Commission, said competition regulators were “interested” in investigating whether the company’s acquisition was aimed at “diversification”. A customer base can be valuable.

Nivea strongly rejects the idea of ​​tying funding to any requirement to use the technology. The company said it is working to “grow our ecosystem, support great companies, and empower the platform for everyone.” We compete and win independent of any investments we make.

“Each company should be free to make technology choices that best suit their needs and strategies,” he added.

The Silicon Valley group’s latest startup deal was a strategic investment in Elon Musk’s xAI with rival chipmaker AMD.

Other notable 2024 investments include participation in funding rounds for OpenAI, Cohere, Mistral, and Perplexity, some of the most popular AI modeling providers.

Nvidia also has a startup incubator, Inception, which has individually helped thousands of startup companies evolve. The introductory program offers “preferred pricing” for beginners on hardware, as well as cloud credits from Nvidia partners.

It also added to Nvidia’s acquisitions, including the acquisition of Run:ai, an Israeli AI workload management platform. The deal was closed this week after a review by the EU’s antitrust watchdog, which ultimately cleared the transaction. The US Department of Justice was also reviewing the deal, Politico reported.

Nvidia acquired AI software groups Nebulon, OctoAI, Brev.dev, Shoreline.io and Deci. Overall, it made more acquisitions in 2024 than in the previous four years, according to Dealroom.

The company is investing millions of dollars in AI teams involved in medical technology, search engines, gaming, drones, chips, traffic management, logistics, data storage and generation, natural language processing and robotics.

His portfolio includes several startups whose valuations have grown into billions of dollars. CoreWeave, AI cloud computing service provider and Significant buyer Nvidia’s chips are poised to float as early as this year at a valuation of up to $35 billion — up from $7 billion a year ago.

Nvidia invested $100 million in CoreWeave in early 2023, and participated in the company’s $1bn equity funding round in May.

Another group, Applied Digital, had seen its share price plummet due to a lack of revenue and heavy debt in 2024, before a group of investors led by Nvidia offered $160 million in equity capital in September, sending its share price up 65 percent. .

“Nvidia is using its huge market cap and huge cash flow to keep buyers alive,” said short seller Nate Kopikar of Orso Partners. “If Applied Digital were to die, that’s (a large amount of) sales that would die with it.”