Nvidia has recently been trying to distance itself from accusations of ring-financing in artificial intelligence projects, with the money it invests ultimately being returned in the form of payments to its own accelerators. Instead, the company seeks to attract industry partners, clients and investment banks to provide funding for young players. The head and founder of Nvidia does not believe that such investments are particularly risky, and is more worried about “missing out on unique opportunities” by refusing to invest.
Image source: NVIDIA
CEO Jen-Hsun Huang thanked him for his generosity explained as follows:”This was the first generation of startups to require tens of billions of dollars in funding. When was the last time anyone heard that a new startup needed billions of dollars to get off the ground and tens of billions to become profitable? This never happened. But this is the true nature of artificial intelligence. The cost of creating AI, the cost of deploying AI is very high in terms of capital intensityCritics of ring deals in the AI industry simply haven’t noticed, Huang said.
Investors’ attention to Nvidia’s activities in this area has increased after the company participated in plans to form a $500 billion fund to build data centers for artificial intelligence infrastructure. In addition, Nvidia also specifically supports individual projects in this area. The company recently agreed to send At least US$1.5 billion Establishing a data center for OpenAI in Ohio.
«There are several companies and cutting-edge AI labs that come along once in a generation, and we want to invest in them. We want to support them. We want to be their partner. Of course, we would be happy if they started building their ecosystem on our platform and started expanding their business with us. That said, the opportunity to invest in them early is inherently great.“, explained the head of Nvidia. He also made it clear that he even regretted missing the opportunity to invest earlier and with a larger amount in similar artificial intelligence startups.
As Huang highlights, such capital-intensive startups have difficulty attracting traditional bank financing because they have no credit history or significant assets that can be used as collateral. Under these conditions, Nvidia can become one of the sources of funding for promising companies in the field of artificial intelligence.
Nvidia leaders are not too worried about the risk of bankruptcies of the companies they finance. According to him, if an individual player has financial problems, the computing resources he purchases can be quickly redirected to the needs of other companies, so the capital invested in the infrastructure is not lost. “The money we invest will generate huge income. I think the risk is small“Huang Renxun guarantees.
NVIDIA has strengthened its confidence in the continued rapid development of artificial intelligence infrastructure through new forecasts: The company expects its own revenue to grow 70% next year and industry demand for its products to double. At the same time, according to Nvidia’s forecast, the accelerator shortage will continue until at least late January 2028.
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