Nvidia, the California-based chip maker, has been making waves in the tech industry. With a market cap of more than $2 trillion by the end of February 2024, Nvidia has become one of the three largest companies by market cap, trailing only behind tech giants Microsoft and Apple1. However, Nvidia’s success story extends beyond just chips. The company is making strategic investments in other technologies that could be significantly impacted by advancements in Artificial Intelligence (AI).
Nvidia’s Leverage in the AI Boom
The recent boom in AI has seen industries beyond tech, such as healthcare and finance, racing to figure out how to implement this groundbreaking technology1. To power AI tech, industries need graphics processing units (GPUs), and Nvidia has been at the forefront of supplying these essential chips1. But Nvidia’s focus isn’t limited to just chips. The company is leveraging its current position in the AI boom to explore other potential areas of growth1.
Nvidia’s Venture Capital Footprint
Nvidia has been expanding its venture capital footprint, investing in startups applying AI across a wide range of industries1. In the past year, Nvidia invested in nearly three dozen startups, more than three times the number of investments the company made in 20221. These investments range from software to pharmaceuticals and healthcare1.
For instance, Nvidia disclosed in a Securities and Exchange Commission filing from February that it had stakes in small companies applying AI, such as Recursion Pharmaceuticals, a drug-discovery company, and SoundHound AI, which develops speech-recognition technology2.
The Nvidia ‘Ecosystem’
Nvidia refers to these strategic investments as feeding into the “ecosystem”1. By investing in AI-focused ventures, Nvidia further fuels the demand for the valuable chips it makes1. This strategy not only provides financial returns but also strengthens Nvidia’s position in the AI landscape1.
In conclusion, Nvidia’s strategy of betting on other tech that could be impacted by AI demonstrates the company’s foresight and adaptability. As AI continues to evolve and influence various sectors, Nvidia’s strategic investments ensure that the company remains at the forefront of this technological revolution.
