Shares of Smaller AI Firms Rise After Nvidia Discloses Investments

Shares of smaller artificial intelligence (AI) firms reportedly experienced a rally Thursday (Feb. 15) after Nvidia, the world’s leading AI chipmaker, disclosed its stake in them as of Dec. 31.

This move by Nvidia offers insights into its growth strategy and highlights its growing influence in the AI world, Reuters reported Thursday. With a rapidly increasing market value, Nvidia has become the third most valuable U.S. company.

Nvidia’s largest investment of $147.3 million was in chip designer Arm Holdings, according to the report. Nvidia previously attempted to acquire Arm in an $80 billion deal but was blocked by antitrust regulations two years ago. While Arm’s shares dipped slightly after Nvidia’s disclosure, they had already surged over 60% in the previous week due to a strong forecast.

In addition, Nvidia invested nearly $76 million in Recursion, a biotech firm focused on accelerating the training of AI models for drug discovery, per the report. Following the disclosure, Recursion Pharmaceuticals saw a 5% increase in its shares. 

Nvidia also invested approximately $3.7 million in SoundHound AI, a developer of conversational voice assistants, according to the report. The disclosure of this investment caused SoundHound AI’s shares to surge by 50%.

Furthermore, Nvidia acquired a stake in Nano-X Imaging, an Israel-based medical device company that utilizes AI software for report analysis, the report said. Nano-X Imaging’s shares rose by 52% following Nvidia’s disclosure.

Additionally, Nvidia provided $3 million in capital to TuSimple Holdings, an autonomous driving technology company that recently delisted from the Nasdaq.

Investors view Nvidia’s involvement as a positive sign, which can help these companies raise capital, the report said. However, Nvidia’s investments indicate a portfolio approach, meaning there may be both winners and losers among the companies it has invested in. 

It was reported Tuesday (Feb. 13) that Nvidia exceeded Amazon in market value, marking the first time since 2002 that the chipmaker is worth more than the retailer after market close.

Nvidia has become the go-to company for computer chips used in AI processes, to such a degree that its gains have shut off the funding tap for its potential competitors.

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