Shares of smaller AI firms rallied on Thursday following the disclosure that Nvidia, the world’s leading artificial intelligence chipmaker, had invested in them.
Nvidia’s latest move offers insights into its growth strategy and signals the company’s growing influence in the AI world as its market value continues to surge, making it the third most valuable U.S. company.
The chipmaker’s largest investment of $147.3 million was in Arm Holdings, a chip designer that Nvidia previously failed to acquire due to antitrust issues. Other investments include nearly $76 million in biotech firm Recursion Pharmaceuticals, $3.7 million in conversational voice assistants developer SoundHound AI, and a stake in Israel-based medical device company Nano-X Imaging, among others.
Nvidia’s involvement in a broad range of companies could potentially lead to more affordable yet hyper-focused chipsets, instead of expensive general-purpose AI chips, according to Insider Intelligence analyst Gadjo Sevilla.
The disclosure of Nvidia’s stakes came in a 13F filing late on Wednesday, which is closely watched by investors and is generally associated with moves made by fund managers rather than public companies.
The news of Nvidia’s investments not only spurred a rally in the shares of the target firms but also attracted retail traders, with SoundHound and Nano-X Imaging among the top five most actively traded stocks by individual investors. Shares of other micro-cap AI firms also rose in tandem, including Guardforce AI and BigBear.ai Holdings.
The investment also received attention from well-known funds such as Rokos Capital Management and Bridgewater Associates, further underscoring the significance and impact of Nvidia’s latest strategic moves in the AI sector.
