In order to catch up with the wave of AI, not only technology giants, but also venture capitalists have started hoarding GPUs.
According to insider sources, venture capital company Andreessen Horowitz (a16z) has hoarded thousands of GPUs, including Nvidia H100 GPUs, and plans to stockpile over 20,000 GPUs in the future specifically for rental to AI startups.
This has already surpassed the number of GPUs used by Musk's AI startup xAI to train the Grok language model.
The insider said that a16z's GPU leasing plan is named "oxygen" to highlight a16z's commitment to aggressively enter the generative AI market. Earlier this year, a16z began providing GPU leasing services to a small number of AI startups in exchange for equity. The AI startups often get discounts below market rates to rent GPUs.
Luma AI was one of the first AI startups to rent GPUs from a16z. In January of this year, a16z led a $43 million Series B investment in Luma AI, valuing the company at $0.25 billion. Luma's founder, Amit Jain, said that other venture capital firms wanted to invest in Luma at a higher valuation, but Luma AI ultimately chose a16z because the firm promised to provide Luma with a series of computing resources including GPU services.
"For AI basic model companies, computing resources are almost everything. It's a resource that burns money constantly. If it's not allocated properly or not allocated at all, it's really bad," Jain said.
a16z's GPU service strategy is also the trend, as even though Nvidia's GPU shortage has eased somewhat, small AI startups often have difficulty obtaining enough high-quality GPUs as they have a smaller budget and have to compete with technology giants for resources.
Therefore, many venture capital firms have set their sights on this track and are providing GPU services to these AI startups.
Venture capital firm Conviction collaborated with a cloud computing service provider last year to acquire the right to use GPU servers, and then rented the servers to AI startups. Also, venture capital firm Index Ventures reached an agreement with Oracle last year to rent GPU servers for some of its startups.