Why Nvidia loves backing and buying startups

Nvidia dominates the AI startup landscape, making startup investments a cornerstone of its strategy. In 2023, the $5.5 trillion chipmaker has invested in a startup once every five days, committing $266 billion to deals so far this year. Nvidia's commitment is rooted in its AI lab experiences, having invested nearly $50 billion in frontier labs over the past year, which accounts for a small fraction of its free cash flow.

These labs are expected to contribute a quarter of Nvidia's business next fiscal year, prompting the company to raise $500 billion of third-party capital. Nvidia's focus now shifts to open models and agentic AI, with nearly all open models running on its platform, according to CEO Jensen Huang. He foresees open models as crucial for startups and enterprises to build proprietary AI.

Furthermore, Huang predicts AI agents will double in the coming year, driving the demand for Nvidia's compute resources. The company estimates that around 70% of AI venture dollars are spent on compute, amounting to over $280 billion for Nvidia, its customers, and competitors in the first half of 2026. As Big Tech and frontier labs establish their infrastructure, Nvidia aims to broaden its market by supporting startups, neoclouds, enterprises, and governments.