Chapter 1: What is the main topic discussed in this episode?
Welcome to the podcast. I'm your host, Jaden Schaefer.
Chapter 2: What investments has NVIDIA made in AI startups?
Today on the show, we are talking 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. So 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. This 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 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 increase.
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Chapter 3: How does NVIDIA's funding strategy benefit its business model?
Everything surged, including their stock price, which turned them into roughly a $4.6 trillion 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 sectors. deals.
Because 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 formal corporation venture arm and ventures, which also ramped up significantly. So according to PitchBook, And Ventures completed 30 deals last year compared to just one in 2024.
NVIDIA 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. So the first one, of course, is OpenAI, the big company behind ChatGPT that we all use.
And NVIDIA's put their, they've essentially first invested in them in October 2024, and they invested apparently, like 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 And then you, I don't know, it's kind of like the Stargate $500 billion 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 whole bunch of craziness that goes on behind the scenes that may make that not an actual $500 billion deal.
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Chapter 4: How did NVIDIA's investment strategy change in 2024?
Now, this is an interesting one. Scale AI gives data labeling infrastructure services, which are used to 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. They
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, or Scale's CEO. And it's basically kind of like another one of these Aqua hires, but they only bought like half the company. Now they can basically control what happens to it.
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.
There 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 at 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 huge.
growing and is absolutely impressive 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 it'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.
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