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January 2, 2025
Nvidia significantly increased its investments in AI companies in 2024. The chipmaker invested a total of one billion US dollars in various AI projects, including funding rounds for startups and several company acquisitions. This represents a 15 percent increase compared to the 872 million US dollars Nvidia invested in 39 funding rounds in 2023.
The majority of the investments went to so-called "core AI" companies that require substantial computing power. Many of these companies are already Nvidia customers. The investments took the form of participation in funding rounds and strategic partnerships. Among the most well-known companies that benefited from Nvidia's investments are Elon Musk's xAI, OpenAI, Cohere, Mistral, and the AI search engine Perplexity.
In addition to financial investments, Nvidia also made more acquisitions in 2024 than in the previous four years combined. One example is the acquisition of the Israeli platform Run:ai, which specializes in the management of AI workloads. Further acquisitions include companies like Nebulon, OctoAI, Brev.dev, Shoreline.io, and Deci. Through these acquisitions, Nvidia is expanding its portfolio and expertise in various areas, including medical technology, gaming, drones, and humanoid robots.
Nvidia's investment strategy seems to be having positive effects for some companies in its portfolio. CoreWeave, a provider of AI cloud computing that received 100 million US dollars from Nvidia in early 2023, is now preparing for an IPO with a potential valuation of up to 35 billion US dollars. This represents a massive jump compared to the valuation of around 7 billion US dollars in the previous year. At the same time, with Nebius, Nvidia is also investing in competing providers.
Nvidia's investment surge has not gone unnoticed by regulators. There are concerns about whether a "dominant company making these large investments" might be pushing for "exclusivity." Nvidia rejects these concerns and emphasizes that its funding does not include any conditions. The company states that it merely wants to "expand its ecosystem, support great companies, and improve its platform for everyone." Companies should be "free to make independent technological decisions."
While Nvidia strengthens its position in the AI market, some of its largest customers, including Microsoft, Amazon, and Google, are developing their own chips to reduce their dependence on Nvidia's graphics processors. Despite these efforts, Nvidia's main competitor, AMD, has so far only managed to capture a small portion of the market. Developments in the AI chip market remain exciting, and it remains to be seen how the competition will evolve in the coming years.
The rapid development in the AI sector and the associated investments by companies like Nvidia highlight the growing importance of artificial intelligence in various industries. It remains to be seen how the increasing concentration of market power will affect innovation and competition in the AI field. Regulatory authorities will certainly continue to closely monitor developments.
Bibliography: https://www.mobileworldlive.com/nvidia/nvidia-racked-up-1b-spend-on-ai-deals-in-2024/ https://www.ft.com/content/f8acce90-9c4d-4433-b189-e79cad29f74e https://www.bitget.com/news/detail/12560604466099 https://m.ytn.co.kr/en/news_view.php?key=202501020321211705 https://www.datacenterdynamics.com/en/news/nvidia-invested-1bn-in-ai-companies-in-2024/ https://www.capacitymedia.com/article/nvidia-closes-run-ai-deal https://analyticsindiamag.com/ai-features/2024-marks-a-year-of-major-acquisitions-for-nvidia/ https://www.reddit.com/r/MachineLearning/comments/1bs1ebl/wsj_the_ai_industry_spent_17x_more_on_nvidia/ https://www.crn.com/news/components-peripherals/2024/analysis-nvidia-made-a-lot-more-money-than-intel-amd-combined-last-quarter ```