Nvidia invested $1 billion in AI deals in 2024

Nvidia invested $1 billion in artificial intelligence companies in 2024, becoming a key backer of startups looking to capitalize on the AI ​​revolution that powers the tech giant’s chips.

The semiconductor giant, which reached a market cap of over $3 trillion in June on the back of huge demand for its powerful graphics processing units (GPUs), has been pumping ever-larger sums into some of its own customers in the emerging sector.

According to company filings and dealroom research, Nvidia spent a total of $1 billion across 50 startup funding rounds and multiple corporate deals in 2024, compared to 2023 when there were 39 startup funding rounds and $872 million in spending.

The vast majority of deals were with “core AI” companies with high computing infrastructure requirements and, in some cases, buyers of their own chips.

Tech companies have spent tens of billions of dollars on Nvidia chips over the past year since ChatGPT’s debut sparked an unprecedented surge in investment two years ago AI.

The surge in deals at Nvidia comes after the company amassed a $9 billion war chest and its GPUs have become one of the world’s most sought-after commodities.

The company’s shares rose more than 170 percent in 2024 as it and other tech giants helped push the S&P 500 index to its level best two-year run of this century.

Nvidia’s $1 billion in investments in “unaffiliated companies” in the first nine months of last year includes both its venture and corporate investment arms. According to the company, this amount was 15 percent higher than in 2023 and more than ten times the investment in 2022.

Some of Nvidia’s largest customers, such as Microsoft, Amazon and Google, are actively working to reduce their dependence on Nvidia’s GPUs by developing their own custom chips. Such a development could make smaller AI companies a more important revenue generator for Nvidia in the future.

“Right now Nvidia wants to have more competition and it makes sense for them to bring in these new players,” said a fund manager who has stakes in a number of companies in which the company had invested.

According to Dealroom, Nvidia closed more deals than Microsoft and Amazon in 2024, although Google remains far more active.

Such prolific deals have raised concerns about Nvidia’s control over the AI ​​industry at a time when the company is facing heightened antitrust scrutiny in the United States, Europe and China.

Bill Kovacic, former chairman of the U.S. Federal Trade Commission, said competition regulators were “interested” in investigating a “dominant company that makes these large investments” to find out whether the purchase of company shares was aimed at ” to achieve exclusivity”. Customer base could prove beneficial.

Nvidia strongly rejects the idea of ​​linking funding to a commitment to use its technology. The company said it is working to “grow our ecosystem, support great companies, and improve our platform for everyone. “We compete and win on our performance, regardless of the investments we make.”

It continues: “Every company should have the freedom to make independent technological decisions that best suit their needs and strategies.”

The Silicon Valley company’s most recent start-up deal was a strategic investment in Elon Musk’s xAI alongside rival chipmaker AMD.

Other significant investments in 2024 included participation in funding rounds for OpenAI, Cohere, Mistral and Perplexity, some of the best-known AI model providers.

Nvidia also has a startup incubator, Inception, which has supported the early development of thousands of young companies. The Inception program offers startups “preferential pricing” on hardware as well as cloud credits from Nvidia’s partners.

There has been an uptick in Nvidia’s acquisitions, including its acquisition of Run:ai, an Israeli AI workload management platform. The deal was completed this week after being reviewed by the EU antitrust regulator, which ultimately approved the transaction. According to Politico, the US Department of Justice was also reviewing the deal.

Nvidia also bought the AI ​​software companies Nebulon, OctoAI, Brev.dev, Shoreline.io and Deci. According to Dealroom, the company made more acquisitions overall in 2024 than in the previous four years combined.

The company is investing heavily, investing millions of dollars in AI groups operating in medical technology, search engines, gaming, drones, chips, traffic management, logistics, data storage and generation, natural language processing and humanoid robots.

Its portfolio includes a number of startups whose valuations have risen to billions of dollars. CoreWeave, an AI cloud computing service provider and significant buyer The Nvidia chip maker is preparing to go public early this year at a valuation of up to $35 billion, up from about $7 billion a year ago.

Nvidia invested $100 million in CoreWeave in early 2023 and participated in the company’s $1 billion capital raising round in May.

Another group, Applied Digital, faced a declining share price, revenue shortfalls and significant debt obligations in 2024 before an investor group led by Nvidia committed $160 million in equity in September, causing its share price to rise 65 percent.

“Nvidia is using its massive market cap and cash flow to keep buyers alive,” said Nate Koppikar, short seller at Orso Partners. “If Applied Digital had died, (a large portion of) the sales would have died with it.”