Key Takeaways
- • Nvidia participated in 105 funding rounds in 2026 alone, often as the largest investor, according to PitchBook, making it one of the most active backers of AI startups.
- • Investors expect Interim CEO Colette Kress to take a more conservative approach to startup investing than Jensen Huang, who stepped down after leading Nvidia for 33 years.
- • Infrastructure startups needing $100 million to $500 million in GPUs previously raised about half that amount from Nvidia at valuations of $1 billion or more, a model VCs say may be hard to replicate.
- • VCs and founders expect smaller checks, lower valuations, and possibly paused dealmaking in AI infrastructure until a clear successor strategy emerges.
- • Analysts see Big Tech companies such as Google, Amazon, Microsoft, and AMD as possible partial replacements, though few expect them to match Nvidia's pre-revenue infrastructure spending.
Summary
Jensen Huang, Nvidia's CEO who co-founded and led the company for 33 years, has officially stepped down, and investors say the departure creates a significant gap in AI startup funding. Over recent years, Nvidia has been a prolific investor, pouring tens of billions of dollars into startups annually. According to PitchBook, it participated in 105 rounds this year alone, often as the largest investor. Maria Davidson, founder of Relational Capital, said that if Nvidia's investment direction changes, "it'll be a big blow to so many young companies."
Investors say Nvidia's most significant investment decisions were often made by Huang personally. Umesh Padval, managing partner at Seligman Ventures, said most major startup investment decisions came from Huang himself. While some hope his successor will resume that dealmaking, investors do not expect that in the short term. Interim CEO Colette Kress is expected to introduce changes, particularly around investments in AI startups that are central to the billion-dollar data center build-out. One investor described her as "much more conservative," adding, "I don't think she's going to commit the same amount of money to keep the early-stage ecosystem going."
Nvidia's largest bets included neoclouds, inference providers, and open-weight models, which are costly for smaller companies to develop. Nvidia backed CoreWeave while it was still private, participated in two of Crusoe's rounds including its $1.4 billion Series E, and agreed to buy Hugging Face for $13 billion, with closing expected in 2027. It also holds investments in Mistral AI, Lambda, and Black Forest Labs. According to the Wall Street Journal, Nvidia wrote an $800 million check into a $2 billion Series B round for Reflection AI last year. Dawn Capital's Shamillah Bankiya said Huang's support helped fund AI development outside the United States, including in Europe, and that a pullback would create a gap "that no one can fill."
The scale of Nvidia's backing also drew scrutiny. Its generous funding effectively tied many startups to its chips, reinforcing its dominant market position. A reduced role could open room for rivals. Dharmesh Thakker, general partner at Battery Ventures, expects Big Tech companies to compete for Nvidia's investment position, depending on who can offer a strong product, ecosystem, and the financial capacity to support startups in competing with CUDA, Nvidia's software platform. He doubts Google, Amazon, Microsoft, or AMD will commit hundreds of millions to pre-revenue infrastructure startups as Nvidia did, though they may back mature companies to drive chip and cloud adoption.
VCs say Nvidia's participation previously gave other investors confidence to back infrastructure companies at high valuations. Nvidia is now expected to be more selective with new companies while writing smaller checks into existing portfolio companies, which could lower valuations. Padval said, "When Nvidia was on the cap table, everyone felt safe." Investors suggest traditional VCs may hesitate or pause certain deals without that backing, though few believe Nvidia's slowdown alone will halt the broader AI boom. Former Nvidia employee Amulya Vishwanath, now running her own VC fund, said the ecosystem is larger than any single person.
Investors say Nvidia's most significant investment decisions were often made by Huang personally. Umesh Padval, managing partner at Seligman Ventures, said most major startup investment decisions came from Huang himself. While some hope his successor will resume that dealmaking, investors do not expect that in the short term. Interim CEO Colette Kress is expected to introduce changes, particularly around investments in AI startups that are central to the billion-dollar data center build-out. One investor described her as "much more conservative," adding, "I don't think she's going to commit the same amount of money to keep the early-stage ecosystem going."
Nvidia's largest bets included neoclouds, inference providers, and open-weight models, which are costly for smaller companies to develop. Nvidia backed CoreWeave while it was still private, participated in two of Crusoe's rounds including its $1.4 billion Series E, and agreed to buy Hugging Face for $13 billion, with closing expected in 2027. It also holds investments in Mistral AI, Lambda, and Black Forest Labs. According to the Wall Street Journal, Nvidia wrote an $800 million check into a $2 billion Series B round for Reflection AI last year. Dawn Capital's Shamillah Bankiya said Huang's support helped fund AI development outside the United States, including in Europe, and that a pullback would create a gap "that no one can fill."
The scale of Nvidia's backing also drew scrutiny. Its generous funding effectively tied many startups to its chips, reinforcing its dominant market position. A reduced role could open room for rivals. Dharmesh Thakker, general partner at Battery Ventures, expects Big Tech companies to compete for Nvidia's investment position, depending on who can offer a strong product, ecosystem, and the financial capacity to support startups in competing with CUDA, Nvidia's software platform. He doubts Google, Amazon, Microsoft, or AMD will commit hundreds of millions to pre-revenue infrastructure startups as Nvidia did, though they may back mature companies to drive chip and cloud adoption.
VCs say Nvidia's participation previously gave other investors confidence to back infrastructure companies at high valuations. Nvidia is now expected to be more selective with new companies while writing smaller checks into existing portfolio companies, which could lower valuations. Padval said, "When Nvidia was on the cap table, everyone felt safe." Investors suggest traditional VCs may hesitate or pause certain deals without that backing, though few believe Nvidia's slowdown alone will halt the broader AI boom. Former Nvidia employee Amulya Vishwanath, now running her own VC fund, said the ecosystem is larger than any single person.
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