Speaking at the Morgan Stanley Technology, Media and Telecommunications Conference in downtown San Francisco on Wednesday, Nvidia CEO Jensen Huang said the company’s recent investments in OpenAI and Anthropic will likely be its last in both sectors, ending the investment opportunity if they go public as expected later this year.
It could be as simple as that. Companies sometimes flock to a company right before its public debut, looking for more upside, but Nvidia is raising money by selling the chips that power both companies. There is no need to pour more money into one or the other to reap returns.
Nvidia doesn’t provide much more on this issue. Asked to comment on Huang’s comments this morning, a spokesperson pointed TechCrunch to a transcript of the company’s fourth-quarter earnings call. Huang said all of Nvidia’s investments are “very respectful and strategically focused on expanding and deepening the scope of our ecosystem.” This is a goal that previous stakes in both companies have almost certainly achieved.
Nonetheless, several other dynamics may also explain the decline, including the cyclical nature of these contracts themselves. When Nvidia first announced in September that it would invest up to $100 billion in OpenAI, MIT Sloan professor Michael Cusumano told the Financial Times he described it as “a wash of sorts” and said, “Nvidia is investing $100 billion in OpenAI stock, and OpenAI is saying it will buy more than $100 billion worth of Nvidia chips.”
Growing concerns that such a deal could trigger an investment bubble may explain why commitments have been scaled back. The $30 billion investment Nvidia closed last week as part of OpenAI’s $110 billion round was well short of its previous commitments. (Hwang has already dismissed another popular theory that there is bad blood between the two companies as “nonsense.”)
Meanwhile, Nvidia’s relationship with Anthropic seemed problematic in and of itself. Just two months after Nvidia announced a $10 billion investment in November, Anthropic CEO Dario Amodei took the stage in Davos and compared the practice of U.S. chip companies selling high-performance AI processors to approved Chinese customers to “selling nuclear weapons to North Korea,” without directly mentioning Nvidia. ouch.
In retrospect, the nuclear weapons comparison was minimal, to say the least. Just days ago, the Trump administration blacklisted Anthropic, barring federal agencies and military contractors from using its technology after the company refused to allow its models to be used for autonomous weapons or mass domestic surveillance.
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Just hours after this announcement, OpenAI said it had signed its own contract with the U.S. Department of Defense. Anthropic called this a “lie,” and the public appears to view it similarly. Within 24 hours of the series announcement, Anthropic’s Claude surpassed ChatGPT to the top of Apple’s US App Store free apps rankings. (Claude was outside the top 100 at the end of January, according to Sensor Tower data.)
Nvidia currently holds stakes in two companies that are moving in very different directions, potentially attracting customers and partners.
Given Nvidia’s web of partnerships, it’s unknown whether Huang has witnessed this change. But the reason he gave Wednesday for possibly pausing future investments — that the IPO window is closed to these kinds of deals — is difficult to square with how late-stage private investments actually work. What seems more plausible is that this is an exit from a really complicated and fast-paced situation.
