A look at tech companies' investments in AI startups: Nvidia and NVentures completed a total of 32 deals in 2023, while Microsoft and M12 made 21 investments
Just last week it was reported chip giant Nvidia, Salesforce Ventures 1 and Cisco all participated in a $450 million investment for Toronto-based AI startup Cohere.
Context & Ripple Effects
Nvidia had already been identified as the most active large-scale AI startup investor in 2023, with Dealroom counting 35 investments under its methodology. This comparison places Nvidia/NVentures' 32-deal tally alongside Microsoft/M12's 21 as evidence that strategic investors were becoming unusually active in the AI startup market.
The reported $450 million Cohere round, backed by Nvidia, Salesforce Ventures and Cisco, shows that these investments could be syndicated across technology companies rather than confined to a single corporate sponsor.
First-order effects
- Nvidia/NVentures and Microsoft/M12 gain a larger portfolio footprint among AI startups, extending their roles beyond selling technology or operating platforms.
- Cohere receives backing from multiple strategic investors, while Nvidia, Salesforce Ventures and Cisco gain a direct stake in a prominent AI startup's development.
Second-order effects
- Startups backed by strategic investors can gain non-cash advantages alongside capital; earlier coverage of Nvidia's investing highlighted access to its research teams as one such benefit.
- Other technology companies face pressure to use corporate venture arms and syndicates to maintain relationships with promising AI suppliers, customers and ecosystem partners.
Third-order effects
- If this pattern persists, venture investing becomes a more important mechanism through which major infrastructure and software companies shape the AI supplier landscape, not merely a financial side activity.
- The concentration of strategic capital around AI startups could make funding access increasingly tied to partnerships, compute relationships and platform alignment, though deal counts alone do not establish the strength of those ties.
The trend: AI leaders are increasingly using corporate venture investment to secure ecosystem influence around the startups building and commercializing AI.