Microsoft, Nvidia Lead In Investing In AI Startups, But Others Close Behind
Just last week it was reported chip giant Nvidia, Salesforce Ventures 1 and Cisco all participated in a $450 million investment for Toronto-based AI startup Cohere. That same day, Cisco and its investment arm — Cisco Investments — made news when it launched a $1 billion AI investment fund.
Those noteworthy machinations by some of the biggest names in tech are just the latest examples of these corporate giants’ desires to at best be leaders in the generative AI sector — and at worst not fall behind.
So far this year, out of the handful of tech titans putting big money in the space, Microsoft and Nvidia — along with their respective venture arms — are among the leaders when it comes to investing in VC-backed, AI-related startups, per Crunchbase data. However, others such as Google and Databricks are not far behind and are perhaps gaining.
Let’s take a look at Big Tech and where they are putting their cash.
Nvidia
Of course, no company has been more successful in the AI revolution than Nvidia (perhaps too successful if the government has anything to say about it — but we’ll get to that). The company has watched its market cap explode to nearly $3 billion as its earnings have outpaced predictions.
The company has spent some of the cash that has come pouring in, investing in 10 rounds involving VC-backed AI companies this year alone, per Crunchbase data. Those deals include seven rounds that were more than $100 million, including:
- Participating in Scale AI’s big $1 billion round led by Accel that valued the data labeling and evaluation startup at a stunning $13.8 billion. The new financing also included investment from Meta and Amazon
- Taking part in Sunnyvale, California-based Figure’s reportedly huge $675 million round at a pre-money valuation of roughly $2 billion. The company is developing AI-enhanced robots that it hopes will be able to perform dangerous jobs and alleviate labor shortages.
- Paris-based Mistral AI’s $640 million round — a mix of debt and equity — at a $6 billion, per a report in the Financial Times.
The company’s venture arm, NVentures, also joined the deal-making party. It has taken part in four deals this year — its biggest being leading an $85 million Series C for AI-powered farming robotics company Carbon Robotics.
Last year, Nvidia completed 22 funding deals in AI itself, along with another 10 by NVentures.
Microsoft
Of course it was early last year that Microsoft launched the loudest shot in the AI arms race — agreeing to a multiyear, multibillion-dollar investment into OpenAI, the startup behind the artificial intelligence tools ChatGPT and DALL-E for a reported $10 billion.
Microsoft has not stopped making significant waves in AI investing since.
The biggest was its huge $1.5 billion strategic investment in United Arab Emirates-based artificial intelligence firm G42 to take a minority stake in the startup.
However, that has not been the only deal the Widows developer has made this year. The company has made a quartet of deals — per Crunchbase data —while its always very active venture arm, M12, has made seven.
Three of the four deals it took part in have been large — at least $675 million — including a $1.05 billion round for London-based self-driving car startup Wayve, as well as the aforementioned Figure round.
All of that is not to even mention Microsoft’s deal in March with Inflection AI to pay the startup $650 million to license its AI software and hire most of its staff. The deal — seemingly framed in a way to get around any regulatory hurdles since it is not officially an acquisition — once again showed the tech titan’s insatiable appetite for all things AI.
The biggest deal M12 has taken part in meanwhile, was a $80 million round for Palo Alto, California-based Foundry, which is developing a public cloud purpose-built for ML workloads.
Last year, Microsoft and M12 made a total of 21 investments in AI-related startups.
Not far behind those AI behemoths is Google and its venture arm, GV, which combined have done seven deals involving VC-backed startups.
However, unlike Microsoft and Nvidia, Google’s dealmaking has been on the smaller side so far this year. No round it has invested in has been more than $57 million. In fact, Google itself has only invested in seed rounds for AI-related startups.
GV probably made the most interesting deal, co-leading a $27.5 million Series A for WitnessAI, a startup specializing in guardrails to make AI more safe and usable.
There’s more
Several other Big Tech firms, as well their investment arms, like Qualcomm and Salesforce have taken part in a few funding deals this year for AI-related startups, but not at the pace of the group above.
However, a still-private company has made considerable noise in the investing space as it has made no secret of its AI intentions. Databricks just last month announced a new Databricks AI Fund as part of Databricks Ventures.
The venture arm was already involved in eight deals this year — some pretty big — before announcing the fund.
Databricks Ventures took part in the $200 million Series D for AI-enhanced work assistant and enterprise search startup Glean that valued the startup at $2.2 billion. It also was involved in AI search startup Perplexity AI’s $73.6 million Series B led by IVP — which also included the likes of Nvidia and Jeff Bezos.
A possible warning
Although there have been no signs of corporate investment in the AI space slowing, last week’s news that both the Federal Trade Commission and the Justice Department would launch probes looking at Microsoft, OpenAI and Nvidia could help send a chill into the AI investing ethos.
While there is no evidence thus far that the DOJ will examine Nvidia’s investment dealings, it has been reported the FTC will probe Microsoft’s relationship with OpenAI, as well as Microsoft’s actions in the Inflection AI situation.
The dual probes could make both companies pause their startup investing — even if that is not the focus of the investigations — until it’s clear how the regulators’ actions may affect their business, if at all.
It also could make other large corporations reconsider some deals, as to not be the next to fall under enhanced scrutiny.
If that happens, venture funding could hit another lull. In May, companies in the AI sector raised 40% of venture funding for the month with $12.5 billion invested across more than 250 companies, based on Crunchbase data.
With AI propping up VC investing right now, the last thing many in the venture — or AI — industry would want to see is Big Tech go away.
Related Crunchbase Pro lists:
Related reading:
- AI Investing Boom Is Not New To Tech Giants (At Least Not Their VC Arms)
- Scale AI Raises $1B In Accel-Led Round; Hits $13.8B Valuation
- Eye On AI: Microsoft Remains Infatuated With AI Startups, And It’s Not Just Inflection And OpenAI
- Salesforce, Nvidia, Cisco Invest In AI Startup Cohere At $5B Valuation — Report
- US Regulators To Take A Look Into Microsoft, Nvidia And OpenAI
Illustration: Dom Guzman
Read More
Microsoft, Nvidia Lead In Investing In AI Startups, But Others Close Behind
Just last week it was reported chip giant Nvidia, Salesforce Ventures 1 and Cisco all participated in a $450 million investment for Toronto-based AI startup Cohere. That same day, Cisco and its investment arm — Cisco Investments — made news when it launched a $1 billion AI investment fund.
Those noteworthy machinations by some of the biggest names in tech are just the latest examples of these corporate giants’ desires to at best be leaders in the generative AI sector — and at worst not fall behind.
So far this year, out of the handful of tech titans putting big money in the space, Microsoft and Nvidia — along with their respective venture arms — are among the leaders when it comes to investing in VC-backed, AI-related startups, per Crunchbase data. However, others such as Google and Databricks are not far behind and are perhaps gaining.
Let’s take a look at Big Tech and where they are putting their cash.
Nvidia
Of course, no company has been more successful in the AI revolution than Nvidia (perhaps too successful if the government has anything to say about it — but we’ll get to that). The company has watched its market cap explode to nearly $3 billion as its earnings have outpaced predictions.
The company has spent some of the cash that has come pouring in, investing in 10 rounds involving VC-backed AI companies this year alone, per Crunchbase data. Those deals include seven rounds that were more than $100 million, including:
- Participating in Scale AI’s big $1 billion round led by Accel that valued the data labeling and evaluation startup at a stunning $13.8 billion. The new financing also included investment from Meta and Amazon
- Taking part in Sunnyvale, California-based Figure’s reportedly huge $675 million round at a pre-money valuation of roughly $2 billion. The company is developing AI-enhanced robots that it hopes will be able to perform dangerous jobs and alleviate labor shortages.
- Paris-based Mistral AI’s $640 million round — a mix of debt and equity — at a $6 billion, per a report in the Financial Times.
The company’s venture arm, NVentures, also joined the deal-making party. It has taken part in four deals this year — its biggest being leading an $85 million Series C for AI-powered farming robotics company Carbon Robotics.
Last year, Nvidia completed 22 funding deals in AI itself, along with another 10 by NVentures.
Microsoft
Of course it was early last year that Microsoft launched the loudest shot in the AI arms race — agreeing to a multiyear, multibillion-dollar investment into OpenAI, the startup behind the artificial intelligence tools ChatGPT and DALL-E for a reported $10 billion.
Microsoft has not stopped making significant waves in AI investing since.
The biggest was its huge $1.5 billion strategic investment in United Arab Emirates-based artificial intelligence firm G42 to take a minority stake in the startup.
However, that has not been the only deal the Widows developer has made this year. The company has made a quartet of deals — per Crunchbase data —while its always very active venture arm, M12, has made seven.
Three of the four deals it took part in have been large — at least $675 million — including a $1.05 billion round for London-based self-driving car startup Wayve, as well as the aforementioned Figure round.
All of that is not to even mention Microsoft’s deal in March with Inflection AI to pay the startup $650 million to license its AI software and hire most of its staff. The deal — seemingly framed in a way to get around any regulatory hurdles since it is not officially an acquisition — once again showed the tech titan’s insatiable appetite for all things AI.
The biggest deal M12 has taken part in meanwhile, was a $80 million round for Palo Alto, California-based Foundry, which is developing a public cloud purpose-built for ML workloads.
Last year, Microsoft and M12 made a total of 21 investments in AI-related startups.
Not far behind those AI behemoths is Google and its venture arm, GV, which combined have done seven deals involving VC-backed startups.
However, unlike Microsoft and Nvidia, Google’s dealmaking has been on the smaller side so far this year. No round it has invested in has been more than $57 million. In fact, Google itself has only invested in seed rounds for AI-related startups.
GV probably made the most interesting deal, co-leading a $27.5 million Series A for WitnessAI, a startup specializing in guardrails to make AI more safe and usable.
There’s more
Several other Big Tech firms, as well their investment arms, like Qualcomm and Salesforce have taken part in a few funding deals this year for AI-related startups, but not at the pace of the group above.
However, a still-private company has made considerable noise in the investing space as it has made no secret of its AI intentions. Databricks just last month announced a new Databricks AI Fund as part of Databricks Ventures.
The venture arm was already involved in eight deals this year — some pretty big — before announcing the fund.
Databricks Ventures took part in the $200 million Series D for AI-enhanced work assistant and enterprise search startup Glean that valued the startup at $2.2 billion. It also was involved in AI search startup Perplexity AI’s $73.6 million Series B led by IVP — which also included the likes of Nvidia and Jeff Bezos.
A possible warning
Although there have been no signs of corporate investment in the AI space slowing, last week’s news that both the Federal Trade Commission and the Justice Department would launch probes looking at Microsoft, OpenAI and Nvidia could help send a chill into the AI investing ethos.
While there is no evidence thus far that the DOJ will examine Nvidia’s investment dealings, it has been reported the FTC will probe Microsoft’s relationship with OpenAI, as well as Microsoft’s actions in the Inflection AI situation.
The dual probes could make both companies pause their startup investing — even if that is not the focus of the investigations — until it’s clear how the regulators’ actions may affect their business, if at all.
It also could make other large corporations reconsider some deals, as to not be the next to fall under enhanced scrutiny.
If that happens, venture funding could hit another lull. In May, companies in the AI sector raised 40% of venture funding for the month with $12.5 billion invested across more than 250 companies, based on Crunchbase data.
With AI propping up VC investing right now, the last thing many in the venture — or AI — industry would want to see is Big Tech go away.
Related Crunchbase Pro lists:
Related reading:
- AI Investing Boom Is Not New To Tech Giants (At Least Not Their VC Arms)
- Scale AI Raises $1B In Accel-Led Round; Hits $13.8B Valuation
- Eye On AI: Microsoft Remains Infatuated With AI Startups, And It’s Not Just Inflection And OpenAI
- Salesforce, Nvidia, Cisco Invest In AI Startup Cohere At $5B Valuation — Report
- US Regulators To Take A Look Into Microsoft, Nvidia And OpenAI
Illustration: Dom Guzman
Read More