Nvidia is weighing more than $750 billion in AI investments, financing deals and partnerships — betting that any growth in the compute market will ultimately benefit its chip business.
Why it matters: The world’s most valuable chip company is bankrolling the same customers racing to build alternatives to its chips
State of play: Nvidia is the largest corporate venture investor in AI by deal value, according to PitchBook research viewed by Axios. – Nvidia invests across several AI labs because they don’t care which model company wins as long as they buy Nvidia’s GPUs, per PitchBook. – Bloomberg reports that Nvidia is involved in proposed AI partnerships and financing arrangements valued at more than $750 billion, although only a portion would represent capital directly at risk for Nvidia. – Nvidia is also discussing a guarantee of as much as $250 billion for an OpenAI data center project, reported by the Wall Street Journal, which helps lower OpenAI’s borrowing costs, but exposes Nvidia if that debt isn’t repaid. Between the lines: Nvidia is throwing money at companies that could end up being competitors. – “Somebody’s going to start competing with them,” Jay Hatfield, chief investment officer of QVOL, told Axios. Follow the money: If AI demand continues to outstrip available compute, alternative chips could expand the overall market without damaging Nvidia. – More capacity could lower AI costs, increase usage and create additional demand for Nvidia’s systems. – But if Nvidia helps finance more capacity than the market can absorb, it could face weaker chip pricing, slower orders and losses on guarantees or investments.
Friction point: Many of Nvidia’s biggest customers are building chips designed to peel away parts of Nvidia’s business. – “One of the things that we work very hard towards is trying to figure out how can we help there just be more compute in the world,” OpenAI co-founder Greg Brockman told reporters at a briefing in July. – OpenAI still relies on…