The latest tech giant to experience a record-breaking year is Nvidia, a Californian chip manufacturer that beat forecasts to have a market valuation of over $2 trillion by the end of February.
Nvidia now ranks among the top three firms in terms of market capitalization, following Apple and Microsoft.
There’s a rather straightforward formula that explains the company’s recent success.
Artificial intelligence developments have industries outside of technology, like healthcare and finance, scrambling to figure out how to use the technology. In order to fuel AI technology, you need chips called graphics processing units, or GPUs. And Nvidia is the real deal.
However, attention isn’t solely focused on chips. In an attempt to capitalize on its present lead in the latest AI frenzy, Nvidia is looking elsewhere.
The business has been investing more money in businesses using AI to transform a variety of industries and growing its venture capital presence.
According to a data study provided to Business Insider by Dealogic, a firm that provides services to financial institutions, the chip manufacturer made investments in around thirty companies in the previous year.
That was more than three times the amount of investments Nvidia had in 2022, according to The Wall Street Journal, which broke the story on the company’s investment strategy first.
The ‘ecology’ of Nvidia
Nvidia’s areas of interest include software, pharmaceuticals, and healthcare. In May, Moon Surgical obtained $55.4 million in venture capital, which was co-led by Sofinnova Partners and NVentures, an Nvidia investment arm. Cathay Health, an investment business focused on healthcare, was one of the participating firms in the funding round.
In a February filing with the Securities and Exchange Commission, Nvidia also revealed that it owned interests in small businesses using artificial intelligence (AI), including drug discovery startup Recursion Pharmaceuticals and speech recognition startup SoundHound AI.
An inquiry for comment sent over the weekend was not answered by representatives for Sofinnova Partners or NVentures.
It looks like the investments were profitable. According to financial documents provided by the Journal, Nvidia’s holdings increased in value from $300 million to over $1.55 billion as of January. Nvidia’s stock shot up 239% in the previous year.
But these investments are about more than just making money, as the Journal pointed out.
Nvidia further satisfies demand for its expensive processors by funding AI-focused businesses, supporting what it calls the “ecosystem.”
Although Nvidia would not comment, a representative for the company linked to a blog post from December that described how it assists businesses that are “harnessing Nvidia technologies.”
“Nvidia’s corporate investments arm focuses on strategic collaborations,” according to the business. “These partnerships stimulate joint innovation, enhance the Nvidia platform, and expand the ecosystem.”
Jensen Huang, the prominent CEO of Nvidia, has likewise stressed the ecosystem’s growth potential.
Huang discussed partnerships with “biology companies, healthcare companies, financial-services companies, AI developers, large-language-model developers, autonomous-vehicle companies, and robotics companies” during a February earnings call.
“All of these startups, large companies, healthcare, financial services, and auto and such are working on Nvidia’s platform,” he stated. “We support them directly.”
It Goes Beyond Chips. Nvidia Is Placing Bets On Other Technologies That AI May Affect
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