NVIDIA plans to significantly expand its investment in AI companies in 2024 - investing 1 billion dollars in 50 companies over the course of one year.

In 2024, the semiconductor giant NVIDIA engaged in its largest investment activity to date, reaching a total investment of $1 billion in AI-related companies. According to the Financial Times (FT), the company participated in 50 startup investment rounds and multiple corporate acquisitions, significantly increasing from the 39 rounds and $0.872 billion investment in 2023.
Reality of Strategic Investments

A successful example of this investment strategy is CoreWeave, an AI cloud computing provider. In early 2023, the company received a $0.1 billion investment from NVIDIA, dramatically increasing its enterprise value from $7 billion to $35 billion in just over a year, and is now preparing for an IPO. Meanwhile, NVIDIA is also investing in the competing provider Nebius, demonstrating a strategic investment strategy focused on the overall development of the ecosystem.
NVIDIA's investment portfolio includes key players in the generative AI field such as OpenAI, Cohere, Mistral, and Perplexity. These companies are involved in the development and operation of advanced AI models that require large computational resources, and are also major customers of NVIDIA GPUs. While the company claims it does not attach infrastructure utilization conditions to its investments, the fact that many investment targets are key users of NVIDIA products suggests the strategic intent behind the company's investment decisions.

A notable point is the increasing trend of corporate acquisitions in 2024. Leading this trend is the acquisition of Israel's AI workload management platform Run:ai for 0.7 billion dollars, surpassing the total of the past four years in a single year. This demonstrates the company's proactive stance in not only investing but also strategically incorporating important technologies and know-how directly.
Regulatory concerns and market dominance.

The rapid expansion of NVIDIA's market dominance is entering a new phase of global regulatory scrutiny. In August 2024, the U.S. Department of Justice simultaneously initiated two antitrust investigations against the company. The core of these investigations revolves around whether the company is unfairly leveraging its dominant position in the semiconductor market, especially in the AI GPU market. Specific focus areas include suspicions of tying additional products in GPU supply contracts and the potential for retaliatory trade restrictions against companies adopting competitors' products.
The scrutiny by regulatory authorities in the field of corporate acquisitions has become even stricter. Of particular interest is the 0.7 billion dollar acquisition of Run:ai carried out in April 2024. Run:ai specializes in AI workload management, and this acquisition suggests that NVIDIA may further advance vertical integration in the AI infrastructure market. Simultaneously, the U.S. Department of Justice is conducting a thorough review of the acquisition of Bright Computing dating back to 2022, as part of a broader reassessment of NVIDIA's past corporate acquisition strategies.

Regulatory pressure in Europe is steadily increasing. The French competition authority conducted a surprise investigation at NVIDIA's office in France in 2023. This investigation has prompted the French authorities to actively consider allegations of anti-competitive behavior against the company. Furthermore, the Competition and Markets Authority (CMA) in the UK and the European Commission have initiated a comprehensive investigation into the competitive landscape in the AI industry, with particular focus on NVIDIA's market behavior.

In response to these intensified regulatory efforts, former Federal Trade Commission (FTC) Chairman Bill Kovacic has expressed interesting views. In an interview with the Financial Times, Kovacic points out the structural risks of dominant companies' large investments leading to market exclusivity. He mentions the strong interest of regulatory authorities in potential outcomes such as de facto trading restraints through investments and suppression of rival companies' growth.
In contrast, NVIDIA asserts the legitimacy of its investment strategy. The company's official statement emphasizes that "our investment activities are aimed at fostering a healthy ecosystem and supporting an environment where all companies can freely choose technologies." Furthermore, they counter with "our success is based on pure technological superiority independent of investments."

NVIDIA's investment strategy, while on the surface advocating ecosystem development, is believed to aim at strengthening its dominant position in AI foundational technologies. Achieving a Market Cap of 3 trillion dollars in 2024 and surpassing Apple multiple times to become the world's largest company in terms of value is a testament to the success of the company's strategy.
However, the movement of major customers such as Microsoft, Amazon, and Google to develop proprietary chips can be seen as a manifestation of the market's vigilance to reduce dependence on NVIDIA. In the future, as regulatory authorities intensify their monitoring, the industry is focusing on how the company will balance innovation and fair competition.