At the Morgan Stanley Technology, Media and Telecom conference in downtown San Francisco on Wednesday, Nvidia CEO Jensen Huang said his company’s recent investments in OpenAI and Anthropic are likely to be the last in both, saying that once they go public as expected later this year, the investment opportunity closes.
It could be that simple. While business is sometimes piled up in companies until practically eve of their public debut in search of more upside, Nvidia is cutting money by selling the chips that power both companies — it doesn’t need to earn its returns by pouring even more money into either.
Nvidia, for its part, doesn’t offer much more on the matter. Reached for comment earlier today after Huang’s remarks, a representative pointed TechCrunch to a transcript of the company’s fourth-quarter earnings call, where Huang said all of Nvidia’s investments are “very clearly, strategically focused on expanding and deepening the reach of our ecosystem,” a goal that previous stakes in both companies no doubt share.
However, some other dynamics may also explain the withdrawal, including the cyclical nature of these settings themselves. When Nvidia first announced it would invest up to $100 billion in OpenAI last September, MIT Sloan Professor Michael Cusumano described it to the Financial Times as “type of washing,” noting that “Nvidia is investing $100 billion in OpenAI stock, and OpenAI says it’s going to buy $100 billion or more of Nvidia chips.”
Growing concern that such deals could be creating an investment bubble may explain why engagement has shrunk. Nvidia’s investment was completed just last week as part of OpenAI’s $110 billion round 30 billion dollars — much less than that previous commitment. (Huang has already dismissed another popular theory — that there’s bad blood between the two companies — as “nonsense.”)
Meanwhile, Nvidia’s relationship with Anthropic seemed full of itself. Just two months after Nvidia announced one 10 billion dollars investment in November, Anthropic CEO Dario Amodei took the stage at Davos and, without directly naming Nvidia, compared the act of US chip companies selling high-performance AI processors to approved Chinese customers to “selling nuclear weapons to North Korea.” Ouch.
In retrospect, the nuclear weapons comparison was spot on to say the least. A few 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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Within hours of that announcement, OpenAI said it had struck its own deal with the Pentagon — a move Anthropic called “painful,” and the public seems to see the same. Within 24 hours of the back-to-back announcements, Anthropic’s Claude topped the free app rankings in Apple’s US App Store, surpassing ChatGPT. (At the end of January, Claude was outside the top 100, according to Sensor Tower data.)
Where he leaves, Nvidia owns stakes in two companies that, at this particular moment, are pulling in very different directions and potentially taking customers and partners along for the ride.
Whether Huang saw any of this coming, given Nvidia’s network of partnerships, is impossible to know. However, the reason given Wednesday for potentially pulling away from future investment — that the IPO window closes the door on that kind of deal — is hard to square with how late-stage private equity actually works. What seems more likely is that this is a way out of a situation that has gotten too complicated, too fast.
