Nvidia Pours Billions Into AI Unicorns: Strategic Play

0:00Welcome to the podcast. I'm your host, Jaden Schaefer. Today on the show, we're talking about about NVIDIA's AI investments. They have made over 67 venture deals, and I think over 54 of them they made across all of 2024. Today on the show, I want to break down all of the investments that NVIDIA has made, who they've invested in, how much they've invested in, what happened to those companies. And this comes as, you know, there's a lot of talk about kind of this money round tripping that's going on where essentially NVIDIA will give money to companies that are going to just turn around and give the money back to NVIDIA to buy GPUs for Compute for AI.

0:35So there's a lot of interesting things going on in this story. We're going to break down all of them. And I think a lot of them you may not have even realized NVIDIA was involved with. So we're going to get into that. Before we do, if you want to build AI tools without knowing how to code, go check out AIbox.ai. This is my own startup. If you have an idea for a tool, whether that's a newsletter generator, or that's a way to automate something else you do at work, think of it as more complex GPTs, but you also can use every AI model and link them all together. If that sounds interesting to you, go check out AIbox.ai.

1:07This is my own startup. I'd love to hear your thoughts on it. And we just did a massive upgrade to our builder, our AI tool builder over on the platform. So let's get into the NVIDIA podcast. I think it's safe to say that no company has ridden the AI wave quite like NVIDIA. Ever since ChatGPT first came out, which is of course over three years ago now, we've seen you know nvidia's seen explosive growth from all of their ai products that that followed and all of the ai products that followed relying heavily on nvidia's chips and so of course the revenue the profits their cash reserves everything surged including their stock price which turned them into roughly a 4.6 trillion dollar company so right now they are the world's dominant supplier of high performance gpus and they have used their financial firepower to dramatically expand their investing, especially in different AI companies and infrastructure deals.

1:58Because of course, if they put money into AI companies, all of the infrastructure required to run it is going to get, you know, they're going to be buying NVIDIA GPUs and pay money back to NVIDIA. So just last year alone, NVIDIA did 67 venture deals. And that is more than their 57 investments that they made the year before in 2024. So all of those numbers don't include all of the deals that were completed through NVIDIA's former corporation venture arm, Nventures, which also ramped up significantly. So according to PitchBook, Nventures completed 30 deals last year compared to just one in 2024.

2:34NVIDIA also said that they are investing strategically and focused on growing the broader AI ecosystem by backing startups that they believe can become true market makers. And of course, we see that this is directly beneficial to them. So I want to go over a list of startups that raised rounds larger than$100 million since 2023 with NVIDIA named as an investor. We'll order them from largest to smallest round sizes. And I think just all of these combined should show just how far NVIDIA's influence now extends beyond just, of course, selling chips. But they are getting ownership shares in every single major AI company at this point.

3:08So the first one, of course, is OpenAI, the big company behind ChatGPT that we all use. And NVIDIA's put their, they essentially first invested in them in October 2024. And they invested apparently reportedly$100 million in their$6.6 billion round that back then valued them at$157 billion. So NVIDIA didn't actually appear in OpenAI's$40 billion round that closed in March last year. But they later announced a strategic partnership that involved another$100 billion in infrastructure investments. although NVIDIA said that you know this deal was not guaranteed to close as it was outlined and so to take it with a grain of salt which I actually appreciate that clarity from NVIDIA because I feel like we see a lot of these deals where they're like leaked or rumored and then you I don't know it's kind of like the Stargate 500 billion dollar deal with Oracle OpenAI and SoftBank but like there's a whole bunch of interesting things that have to happen for that deal to execute including SoftBank being able to come up with the money and Oracle and OpenAI and like there's a bunch of craziness that goes on behind the scenes that may make that not an actual 500 billion dollar deal um so anyways i do appreciate the clarity from nvidia calling that out because i don't feel like anyone else does that okay the next one of course is anthropic who has the second biggest ai company basically um i guess if you're not including google behind open ai which is clod they have a big focus on safety reliability and enterprise use and that's where anthropic and cloud are kind of like competing with open ai's chat gpt so in november last year nvidia made its first direct investment into anthropic they said that they would give them up to 10 billion dollars as part of a strategic round um that it also included a 5 billion dollar investment from microsoft as part of that arrangement anthropic agreed to spend tens of billions of dollars on cloud compute and nvidia hardware so again it's a direct we give you money you buy our hardware Cursor is the most popular AI code editor out there.

5:05It helps developers write, refactor, understand code faster. And NVIDIA made a first strategic investment in November as part of a$2.3 billion Series D that valued them at$29.3 billion. NVIDIA's kind of doing that is kind of their official entry as a shareholder after years of just being an enterprise customer. xai is elon musk's ai company which is of course focused on building large language models and general purpose ai systems they have grok which is incorporated into tesla as kind of the voice assistant and also incorporated into x the or formerly twitter the platform where it can break down stuff there's like a lot of controversy with it um despite open ai previously encouraging some of their investors to avoid funding rivals which of course is just ridiculous and you can't tell Nvidia who did not fund because Nvidia is, you know, Nvidia is the market maker.

5:58It's massive $4 trillion company. Despite all that, Nvidia participated in OpenAI's$6 billion round last year, and they were expected to invest up to$2 billion more as part of OpenAI's planned$20 billion raise. They had a deal that was kind of structured in part to fund additional Nvidia hardware purchases. Again, this is making a lot of sense. Mistral AI, I don't think I realized this, but of course Mistral AI they so they're out of France they have this open source and they also have a commercial large language model that's designed to compete with US and Chinese labs it's not as good as open AI if I'm speaking frankly and by the way every model I've mentioned so far you can go try on AIbox.ai my platform we have a we have a playground where you can test out every model against each other and show the results side by side but Mistral is a big company they're doing great and they're really focusing on enterprise adoption they're focusing a lot of the needs of Europe.

6:50NVIDIA invested for the third time when Mistral raised their 1.7 billion euro round. It was their Series C. They did that in September last year. That put them at about a $13.5 billion valuation. And NVIDIA kept coming back to invest in Mistral. I think that they don't want to just be stuck in the United States. They want to spread out across a lot of the AI companies around the world. Reflection AI is building an open source large language model that's kind of positioned as a lower cost alternative to a lot of the closed systems. And I think when you say lower cost, I would also argue that means like less high quality, but it's open source, which is amazing.

7:25So in October, NVIDIA was one of the largest investors in their$2 billion round, which valued, it's only a one year old startup, but it valued them at$8 billion. And they're positioning themselves as a US counterweight to China's DeepSeek. So they're like, look, we're going to, obviously DeepSeek is kind of this open source model out of China that's got a lot of attention, but it's not as good as OpenAI, but it's open source. We want to do that same thing, but inside of America. The next one is Thinking Machine Labs. So this is a new AI research company. It was founded by Miriam Ratti, who is OpenAI's former CTO.

7:58And NVIDIA joined a long list of investors that gave them about$2 billion in a seed round they did in July last year. They were valued at$12 billion. They haven't even released a product. It's just Miriam Ratti, the former OpenAI CTO. She's got enough clout. She goes and decides to start a company, raises$2 billion and has a$12 billion valuation. No products launched, but NVIDIA signed up to help fund that. Inflection AI. So Inflection AI, they built a conversational AI model designed to act as an emotional intelligence personal assistant. And consequently, after they released Inflection AI, they had raised a lot of money.

8:36So they actually, NVIDIA backed their $1.3 billion round in 2023. But ever since then, Inflection basically got Aqua hired, where the CEO of Inflection, Mustafa Sullyman, got hired by Microsoft as their CEO of AI. They brought in basically the whole main team. Inflection hasn't really done much since. Basically, it's a shell of its former company. I think they brought in the former CEO of Mozilla Firefox to go run it afterwards. And they do still have a product and they do still serve enterprise. I never hear it talked about as a company. Sadly, they raised$1.3 billion two years ago. So it'll be interesting to see like if that if anything ever happens to that company, but it like for all intents and purposes, it basically got acquired by Microsoft.

9:20Crusoe. Oh, and by the way, when all of that happened, I think all the investors did get payback. So NVIDIA would have made money back on that deal. Okay, Crusoe builds massive AI focused data centers and also energy infrastructure. And NVIDIA joined their$1.4 billion series E in October last year, which gave them a$10 billion valuation as they were expanding their data center campuses for OpenAI's Stargate projects. So obviously they're working directly with one of these big projects. Nscale builds AI-optimized data centers, but they do it over in Europe. NVIDIA participated in their$1.1 billion round.

9:53They also joined a$340 million safe financing, which was tied to the company's role in OpenAI's Stargate infrastructure. So it's kind of interesting because open AI has got this big deal, but in this big Stargate program, we're going to spend$500 billion, but in order to do it, they need like a lot of compute and infrastructure. So they got all these infrastructure companies who go raise money to build out the infrastructure for open AI. I know it's just, it's crazy the amount of money. So I mean, in all, you know, to give NVIDIA a lot of clout and like credit, they are making an insane amount of money, but they are dumping it right back into the whole industry.

10:26I mean, you could basically say NVIDIA is building the AI industry and the data center industry because they're funding so much of it. Obviously, their company is at the very top because everyone has to buy their products, but they are funding a lot of these companies. Wave develops self-learning AI systems for autonomous driving that improve through real world experience. NVIDIA joined their$1.01 billion round that they did in 2024. They're expected to invest another$500 million as they expand testing in the UK and California. So that should be coming up soon. Figure AI builds AI systems for humanoid robots designed to work in factories, warehouses, and other industrial settings.

11:04We've seen a lot of really cool demo videos from Figure AI. NVIDIA joined their$1 billion Series C in September, which gave them a$39 billion valuation. And NVIDIA first invested in them in 2024. So this was a follow-on round. Scale AI. Now this is an interesting one. Scale labeling infrastructure services, which are used to train, train LLMs. So you can imagine like, I've looked at kind of what scale AI does, they'll go find a whole bunch of lawyers, they'll give a whole bunch of legal stuff and have the lawyers label the data and give them kind of this customized data labeling, which you don't get anywhere else.

11:37They, they employ an insane amount of people, I want to say, I don't want to misquote the number, but they employ a lot of people. And they're highly specialized, like lawyers, doctors, and they're going and labeling specific legal or medical data and explaining what it's used for. And then they go around and sell this data back to AI companies. Sometimes it's contracted ahead of time. In any case, NVIDIA joined their$1 billion round that they did in 2024. And that was before Meta later bought 49 % of the company. And they also hired Meta's skills CEO. And it's basically kind of like another one of these aqua hires, but they only bought like half the company.

12:14Now they can basically control what happens to it. And consequently, after that happened, OpenAI and Google both said they were going to stop using scale because they didn't want to give money to a company that, I don't know, was tied to Meta, which was a competitor. At the end of the day, I mean, I don't know. I guess if there's other alternatives, that's not the end of the world. So as you can see, NVIDIA is a massive player dumping a lot of money into the top AI companies. I kind of covered all of the deals that were over a billion dollars, any companies that raised over a billion dollars that NVIDIA was participating in.

12:42there is a lot more that raised hundreds of millions and nvidia has also jumped in on a ton that have raised you know just under a hundred million dollars so nvidia is participating in all levels of the industry right now and i think that they're one of the major players pushing a ton of capital into these companies which turn around and give it back to them and help support their company i believe that this is a great strategy for nvidia because they're also getting equity in all of these companies and so nvidia's portfolio is growing and is absolutely impressive So essentially they're like financing the entire industry while their stock price goes up so they can continue financing the entire industry and their stock can keep going up.

13:16It's kind of crazy. A lot of people call it a bubble or cyclical or, you know, round tripping the money. But I think at the end of the day, it's very strategic and a good move on NVIDIA's part because at the end of the day, now they own a massive chunk of tons of the top companies in this massively growing industry. Thank you so much for tuning into the podcast today. If this was interesting or entertaining or you learned anything new, make sure to leave a review on the podcast. It helps the show out a ton. And also make sure to go check out AIbox.ai if you want to try all of the models I talked about on the show today for only$20 a month.

13:46Thanks so much for tuning in. I'll catch you in the next episode.