Huang's exit leaves AI startups scrambling for funding

Nvidia CEO steps down after 33 years

Jensen Huang, who co-founded and led Nvidia for 33 years, has officially resigned as the company's CEO. One neocloud founder called it like a bomb going off.

“It's like a bomb went off”

Nvidia poured billions into startups

Over recent years, Nvidia invested tens of billions into startups annually and participated in 105 rounds this year alone, often as the largest investor, according to PitchBook.

Huang made most investment decisions

Most significant decisions to invest in startups came from Jensen himself, according to Umesh Padval, managing partner at Seligman Ventures. Padval has known Huang since serving on the board of Mellanox Technologies.

Interim CEO expected to be more cautious

Nvidia's interim CEO, Colette Kress, is expected to institute changes, especially regarding Nvidia's investments into AI startups. One investor said she is much more conservative than Huang.

“She's much more conservative”

Nvidia backed expensive infrastructure plays

Nvidia's biggest bets were backing neoclouds, inference providers, and open weight models, which are expensive for smaller companies to build. Jensen's initiatives enabled an ecosystem to emerge despite that.

Massive checks into pre-revenue companies

Nvidia backed CoreWeave when private, participated in Crusoe's rounds including a one point four billion dollar Series E, and wrote an eight hundred million dollar check into Reflection AI's two billion dollar Series B.

Huang backed open source globally

Huang invested heavily in open source and across the world, including Europe.The cease of that support outside America would be a massive funding and ecosystem gap that no one can fill, according to Shamillah Bankiya.

“would be a massive funding and honestly ecosystem gap that no one can fill”

Rivals unlikely to match Nvidia's spending

Companies like Google, Amazon, Microsoft, and AMD may back mature startups to drive adoption of their chips, but Dharmesh Thakker at Battery Ventures doubts they will pour hundreds of millions into pre-revenue infrastructure startups.

Valuations expected to drop sharply

Infrastructure companies that needed one hundred million to five hundred million dollars in GPUs would often raise half that amount at valuations of one billion dollars or more from Nvidia.

Investors will pause dealmaking

When Nvidia was on the cap table, everyone felt safe. Without that backing, traditional VCs are likely to think twice before writing checks into these startups and may even pause certain dealmaking.

“When Nvidia was on the cap table, everyone felt safe”

Ecosystem bigger than one person

Few believe Nvidia's investment slowdown will halt the broader AI boom.Amulya Vishwanath, an ex-Nvidia employee now running her own VC fund, said founders must be held accountable and the ecosystem is bigger than one person.

“the ecosystem is bigger than one person”