Having continually confirmed its status as the world’s most valuable public company, Nvidia is expected to more than double its revenue last year to $129 billion, although the results for the period will not be summed up until February. It is not surprising that over the past year it has invested $1 billion in the capital of approximately 50 startups related to the topic of artificial intelligence.
Image source: NVIDIA
As the Financial Times explains, citing Dealroom data and Nvidia’s own reporting, this company limited itself to supporting only 39 startups in 2023, and expenses for them did not exceed $872 million. Last year, the bulk of Nvidia’s partners who received funding from it were also buyers its computing accelerators. Artificial intelligence infrastructure companies spent tens of billions of dollars on Nvidia computing accelerators last year. This allowed the company to accumulate about $9 billion in free cash flow by the end of the third fiscal quarter. Nvidia shares increased in price by 2.7 times last year.
In the first nine months of 2024, Nvidia was able to invest $1 billion in equity in unrelated companies. Compared to the same period in 2023, the corresponding amount increased by 15%, and in 2022 it spent more than 10 times less on these needs. From a long-term strategy perspective, Nvidia’s investments in smaller companies make sense as current major clients like Microsoft, Amazon and Google are focused on creating their own computing accelerators. In the future, they will be able to reduce their dependence on Nvidia components, so it is important for the company to prepare a certain kind of “safety cushion”. She herself can literally grow future clients. At the end of 2024, Nvidia surpassed Microsoft and Amazon in terms of the number of deals concluded, although it lost to Google. According to Nvidia representatives, the company does not force companies in which it invests to purchase exclusively its own computing accelerators.
Let us recall that Nvidia, together with its competitor AMD, recently invested in the capital of the startup xAI, founded by Elon Musk as an alternative to OpenAI, in the formation of which this billionaire also took part. Nvidia also invested last year in OpenAI, Cohere, Mistral and Perplexity. In addition, Nvidia controls the investment incubator Inception, which helps young AI companies gain access to Nvidia hardware and its partners’ cloud infrastructure on more favorable terms.
In addition to the startup Run:ai, Nvidia also managed to buy AI software developers such as Nebulon, OctoAI, Brev.dev, Shoreline.io and Deci. In total, it closed more deals last year than in the previous four years. Nvidia’s investment interests included medical technology, search engines, gaming, logistics and semiconductor startups, as well as robotics, logistics and data processing.
AI cloud services provider CoreWeave, which was once backed by Nvidia, is preparing to raise capital this year, valuing its business at $35 billion, up from just $7 billion a year earlier. After investing $100 million in CoreWeave in 2023, Nvidia spent another $1 billion to support the startup last May. Nvidia and its partners are believed to have saved Applied Digital from ruin by investing $160 million in its capital last September.