AI founders fear Jensen Huang departure blasts hole in startup funding, TechCrunch reports

A major investor steps back

Huang co-founded Nvidia and led the company for 33 years before stepping down, according to the report. His exit has raised concerns among startup investors about what happens to Nvidia’s wide-ranging investment activity.

PitchBook data cited in the report shows Nvidia took part in 105 funding rounds this year, often as the largest investor. Relational Capital founder Maria Davidson said a change in that approach could significantly hurt young companies.

Nvidia backed costly ventures

Nvidia’s investments included neoclouds, inference providers and open-weight models, areas that can require substantial spending. Ghost co-founder Zain Javaid said Huang’s support helped an ecosystem develop despite the costs.

The company backed CoreWeave while it was private and took part in two Crusoe funding rounds, including a $1.4 billion Series E. It also invested in Mistral AI, Lambda and Black Forest Labs, and made an $800 million investment in Reflection AI’s $2 billion Series B, according to the Wall Street Journal.

The article also says Nvidia bought Hugging Face this year for $13 billion, with the deal expected to close in 2027. It describes Nvidia as a frequent lead investor in these deals.

A cautious near-term outlook

Nvidia interim CEO Colette Kress is expected to bring changes to the company’s AI startup investments. An unnamed investor described her as more conservative and doubted she would commit the same sums to sustain early-stage companies.

Umesh Padval of Seligman Ventures said many important startup investment decisions had often come from Huang personally. Investors hope a future successor may revive the dealmaking, but they do not expect that to happen soon.

Dawn Capital’s Shamillah Bankiya said Nvidia’s support reached AI startups from applications to neoclouds. Bankiya also warned that reduced backing beyond the United States, including in Europe, could leave a funding and ecosystem gap.

Potential rivals and limits

Nvidia’s broad backing also reinforced its chip business: the report says some startups were effectively tied to using Nvidia chips. A pullback could create more opportunities for competing chipmakers and cloud companies.

Battery Ventures partner Dharmesh Thakker expects major technology companies to compete for Nvidia’s investment role, depending on their products, ecosystems and ability to fund them. He cited Google, Amazon, Microsoft and AMD as possible backers of more mature startups.

Thakker is less confident those companies will invest hundreds of millions in infrastructure startups that have not yet earned revenue. The article ends mid-sentence while describing Nvidia’s past financing of companies needing $100 million to $500 million in GPUs, so it does not provide the full comparison.