THE CRUNCH
Jensen Huang has stepped down as Nvidia's chief executive after 33 years, and venture investors say his departure leaves a large gap in AI startup funding. Nvidia has poured tens of billions into startups annually and took part in 105 rounds this year alone, often as the largest investor, according to PitchBook. "It's like a bomb went off," one neocloud founder told TechCrunch.
Much of that dealmaking ran through Huang personally. Umesh Padval of Seligman Ventures, who has known Huang since serving on the board of networking chipmaker Mellanox, said most significant investment decisions often came from Huang himself. Nvidia's biggest bets backed neoclouds, inference providers and open weight models, including CoreWeave while private, two Crusoe rounds including its $1.4 billion Series E, and an $800 million check into Reflection AI's $2 billion Series B last year before the startup earned meaningful revenue, according to the Wall Street Journal.
Interim CEO Colette Kress is expected to make changes, particularly around investments in AI startups at the centre of the data centre build-out, which has been a source of Wall Street concern. "She's much more conservative," one investor said of Kress. Investors are not hopeful dealmaking resumes in the short term, and Maria Davidson of Relational Capital warned that any change of direction would be "a big blow to so many young companies".
There is a second side to the story. Nvidia's generous cheques effectively locked startups into using its chips, reinforcing a dominant market position that at times felt like a monopoly. A more conservative Nvidia could open room for rivals. Battery Ventures' Dharmesh Thakker expects Big Tech rivals to vie for Nvidia's investment crown, while companies like Google, Amazon, Microsoft and AMD may back mature startups to drive adoption of their chips and clouds, but he doubts they will fund pre-revenue infrastructure startups needing hundreds of millions the way Nvidia did.