How Nvidia’s Investment Arm Is Supercharging A New Class Of AI Startups

Forbes

The trillion-dollar chipmaker has done over two dozen deals, through its Nventures investing arm and corporate development team. Portfolio companies say the deal comes with intangibles, like access to research teams and even the company’s famous CEO.  When Terray Therapeutics, an AI biotech firm, first trained its artificial intelligence model Coati early last year, CEO Jacob Berlin thought the technology was “pretty good.” It was functional, but could be better.  That was before Nvidia, the trillion-dollar chipmaker, invested in the startup, which specializes in small-molecule drug discovery. After the investment, announced in November, Terray retrained the model entirely, armed with boosted computing resources and Nvidia’s engineering prowess. “We just saw much, much better performance,” Berlin told Forbes. “And we couldn't have gotten there without the collaboration with Nvidia and their support.”  Read the full story on Forbes: https://www.forbes.com/sites/richardnieva/2024/02/15/nvidia-nventures-ai-investments/?sh=543769096025  Forbes Daily Briefing shares the best of Forbes reporting on wealth, business, entrepreneurship, leadership and more. Tune in every day, seven days a week, to hear a new story. Subscribe here: https://art19.com/shows/forbes-daily-briefing  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00 Here's your Forbes daily briefing for Tuesday, February 20th.

00:04 Today on Forbes, how NVIDIA's investment arm is supercharging a new class of AI startups.

00:13 When Terray Therapeutics, an AI biotech firm, first trained its artificial intelligence

00:18 model CODI early last year, CEO Jacob Berlin thought the technology was "pretty good."

00:26 It was functional, but could be better.

00:29 That was before NVIDIA, the trillion-dollar chipmaker, invested in the startup, which

00:34 specializes in small-molecule drug discovery.

00:38 After the investment, announced in November, Terray retrained the model entirely, armed

00:43 with boosted computing resources and NVIDIA's engineering prowess.

00:47 Berlin told Forbes, "We just saw a much, much better performance, and we couldn't have gotten

00:53 there without the collaboration with NVIDIA and their support."

00:58 The revamping of the AI model illustrates the intangibles that come with having the

01:02 world's most valuable chipmaker on your cap table.

01:06 That's the case for more than two dozen companies that NVIDIA has invested in over the last

01:09 two years, through both its venture capital arm, InVentures, and broader corporate development

01:15 team.

01:16 In Terray's case, the X-factor was access to NVIDIA's researchers and engineers, who

01:21 know how to coax the most power out of the chip giant's coveted GPUs, or graphics processing

01:27 units, used for large-scale AI development.

01:31 In other cases, it means getting a quick email response from CEO Jensen Huang, an increasingly

01:36 more powerful figure in the tech industry, who leads the committee that signs off on

01:40 NVIDIA's investments.

01:42 And for many of the startups, it means getting the seal of approval of one of the most important

01:46 companies of the ongoing AI frenzy.

01:50 Sid Siddique, corporate vice president and head of InVentures, told Forbes, "We invest

01:56 broadly, in the broadest sense of the word.

01:59 Not just dollars, but expertise, technology, benefits, and all kinds of stuff."

02:05 He noted that one goal of the investments is "generating a healthy return for NVIDIA,

02:09 just like any financial investor."

02:13 Many of the biggest companies in tech have their own venture capital vehicles, including

02:17 Alphabet, Microsoft, and Salesforce.

02:20 But NVIDIA is relatively new to the game, and companies in its portfolio said it can

02:25 in some ways offer benefits beyond those of a traditional venture capital firm.

02:30 The unit was founded in early 2022, months before the release of OpenAI's ChatGPT, which

02:36 was largely trained on NVIDIA's GPUs, touched off a wave in Silicon Valley, bringing AI

02:41 into the mainstream.

02:43 NVIDIA has been on a tear of investments ever since, including A-list AI unicorns Cohere,

02:49 Hugging Face, and Inflection.

02:52 Sadiq said, "There was this little thing called Gen AI that got going.

02:57 You go from zero to like whatever.

02:59 It's infinite growth from zero."

03:02 In December, the company said it had announced 14 investments since the beginning of 2023,

03:07 in areas including health, enterprise, and logistics.

03:11 In one sign that things are still just ramping up, InVentures' website only launched last

03:15 month.

03:17 Sadiq told Forbes that InVentures has already "done a couple" of investments in the new

03:22 year, though he declined to provide further details.

03:26 Forbes spoke to seven NVIDIA portfolio companies, who declined to share specific terms of their

03:30 deals with the chip giant.

03:32 Some claimed to have gotten better access to NVIDIA's chips, right now the most sought-after

03:36 resource in Silicon Valley, though they did so without sharing specifics.

03:41 Others said they got no special treatment.

03:43 Jorge Torres, CEO of MindsDB, a startup that allows developers to connect AI models to

03:49 data sources, said, "A VIP pass would be a bit of an exaggeration, but it's just a little

03:55 bit better than if we didn't have this relationship."

03:59 InVentures told Forbes it doesn't allow prioritized access to GPUs.

04:03 As startups and tech giants alike compete in an arms race to train the most powerful

04:08 AI models, GPUs have become a new form of currency.

04:12 But Kanjong Kiu, CEO of MBU AI, a startup that aims to develop artificial intelligence

04:18 that can reason like humans, said that doesn't mean NVIDIA's portfolio companies didn't inquire

04:23 during the deal-making process.

04:25 Laughing, Kiu said, "We know we're not going to get preferential access, even though we

04:30 were like, 'Will we get preferential access?'"

04:34 NVIDIA and multiple portfolio company founders said there were no requirements or earmarks

04:38 for the startups to spend any of the capital on NVIDIA chips or other products.

04:44 For full coverage, check out Richard Nieves' piece on Forbes.com.

04:50 This is Kieran Meadows from Forbes.

04:52 Thanks for tuning in.

04:53 See you next time.

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