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Microsoft, Nvidia Lead In Investing In AI Startups, But Others Close Behind

Jun 12, 2024 - news.crunchbase.com
Tech giants Nvidia, Microsoft, Google, and others are heavily investing in AI-related startups, with Nvidia and Microsoft leading the pack, according to Crunchbase data. Nvidia has invested in 10 rounds involving VC-backed AI companies this year, including a $1 billion round for Scale AI, while Microsoft made a significant $1.5 billion investment in UAE-based AI firm G42. Google and its venture arm, GV, have made seven deals involving VC-backed startups, albeit smaller in size.

However, recent probes by the Federal Trade Commission and the Justice Department into Microsoft, OpenAI, and Nvidia could potentially slow down corporate investment in the AI sector. While there's no evidence that Nvidia's investment dealings will be examined, the FTC will probe Microsoft's relationship with OpenAI and its actions in the Inflection AI situation. This could cause large corporations to reconsider some deals to avoid falling under enhanced scrutiny.

Key takeaways:

  • Big tech companies such as Nvidia, Microsoft, Google, and their respective venture arms are leading in investing in VC-backed, AI-related startups, with others like Databricks not far behind.
  • Nvidia has invested in 10 rounds involving VC-backed AI companies this year alone, including seven rounds that were more than $100 million. Its market cap has exploded to nearly $3 billion as its earnings have outpaced predictions.
  • Microsoft made a significant investment in AI last year with a multiyear, multibillion-dollar investment into OpenAI. This year, it has made a $1.5 billion strategic investment in UAE-based AI firm G42 and has been involved in several other large deals.
  • There are concerns that the recent probes by the Federal Trade Commission and the Justice Department into Microsoft, OpenAI, and Nvidia could potentially slow down corporate investment in the AI space.
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