Nvidia Dominates AI Startup Investments, Leaving Microsoft and Google Behind

Nvidia’s Unmatched Investment Strategy

Nvidia has been leading the charge in AI startup investments, consistently outpacing competitors like Microsoft and Google. Just last month, Lambda, a provider of AI computing services, secured a $480 million Series D, boosting its valuation to $2.5 billion. On the same day, Together AI, a platform for building custom AI models, raised $305 million at a $3.3 billion valuation, both with Nvidia as a key investor.

Nvidia's Funding Dominance

In the past year alone, Nvidia participated in 26 funding rounds totaling $18.8 billion, significantly more than the $4.5 billion from its two dozen deals in 2023. This figure includes major investments in OpenAI and xAI, which alone accounted for $6.6 billion and $6 billion respectively.

Comparison with Microsoft and Google

• Microsoft has been more conservative, engaging in nine investments totaling nearly $10 billion last year, though it saw a slight increase to $12.2 billion in 2023. Its notable deals overlap with Nvidia, including significant investments in OpenAI and Wayve.
• Google, on the other hand, experienced a staggering two-thirds drop in corporate investing, participating in only four deals totaling $3.2 million. However, it has recently ramped up investment activities with a $1 billion injection into Anthropic and a $350 million Series A for Apptronik.

Nvidia's Strategic Focus

Nvidia’s investments are not just a side venture; they are integral to its corporate investment strategy. The company’s venture arm, NVentures, has also been active, participating in 14 investments totaling $89 million last year, and 11 deals worth $824 million in 2023. Nvidia's commitment to the AI ecosystem is clear, leveraging its high-performance chips to fuel its investments.

Shifting Focus of Tech Giants

While Nvidia and Google seem eager to continue investing in startups, Microsoft appears to be shifting its focus towards internal development amid its complex relationship with OpenAI. Despite changing strategies, these tech giants are still significantly funding startups aiming to carve out a niche in the AI landscape.