Nvidia Emerges as the Most Active Investor in AI Startups in 2023
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Nvidia, the global top-tier chip manufacturer from Silicon Valley, became one of the most active investors in the artificial intelligence sector in 2023, significantly expanding its investments in AI startups.
According to the Financial Times, Nvidia has invested in "over twenty" companies this year, ranging from multi-billion-dollar new AI platforms to small startups. Dealroom data shows that Nvidia participated in 35 deals in 2023, nearly six times more than last year.
Mohamed Siddeek, head of Nvidia's specialized venture capital division NVentures, told the Financial Times that the primary criterion for Nvidia's investments is the relevance to the company's technology. "Companies that use our technology, rely on our technology, and build businesses on our technology... I can't think of any company we've invested in that doesn't use Nvidia products."
Nvidia's investment portfolio includes Inflection AI and Cohere, the biggest competitors to ChatGPT developer OpenAI, as well as other investments such as AI developer data and tools provider Hugging Face and cloud infrastructure company CoreWeave, which focuses on high-performance computing applications.
Additionally, Nvidia's recent investment was in Paris-based AI startup Mistral, which reached a valuation of €2 billion this month. Nvidia invested from its own balance sheet, contributing tens of millions of dollars. NVentures aims to 'generate healthy returns' from its investments, while its corporate development team can invest for more strategic purposes. Nvidia both leads investment rounds and co-invests with venture capital firms.
Some startups hope to establish closer ties with the group by accepting Nvidia's investment. A venture capitalist who co-invested with Nvidia said, 'They are clearly a very strategic partner; you want to be their priority when they launch new chips.'
Nvidia denies seeking special terms with startups to ensure they use its chips. 'We are as investor-friendly as possible,' Siddeek said. 'We don’t have any specific conditions.'
Inflection AI—which announced a $1.3 billion funding round in June led by Nvidia, Microsoft, Bill Gates, and others—stated that it secured access to 22,000 H100 GPUs through alliances with the chipmaker and CoreWeave. Late last year, CoreWeave mentioned it was among the first to receive H100 chips, alongside cloud giants like Amazon, Google, Microsoft, and Oracle.
Siddeek denied that the group's investment companies had priority access to its chips. "We don't help anyone cut in line," he said.