Jensen Huang has resigned as CEO of Nvidia, ending a 33-year run in which he co-founded and led the company, and investors and founders say his departure removes the startup ecosystem's most active backer and leaves far less capital available for young companies. Nvidia has invested tens of billions of dollars in startups annually, and according to PitchBook it took part in 105 rounds this year alone, frequently as the largest investor. One neocloud founder described hearing the news as a bomb going off.
Maria Davidson, founder of Relational Capital, said a change in that investment direction would be a big blow to many young companies. Dawn Capital's Shamillah Bankiya said Nvidia has been carrying almost every AI-native startup from application to neocloud. Umesh Padval, managing partner at Seligman Ventures, said most of the significant decisions to invest in startups often came from Huang himself; Padval has known Huang since serving on the board of Mellanox Technologies, which Nvidia acquired for approximately $7 billion in 2020. Investors hope Huang's eventual successor will revive his dealmaking, but they do not expect it in the short term.
Interim CEO Colette Kress is expected to institute changes, particularly in Nvidia's investments in AI startups at the center of the billion-dollar data center build-out, an area where Huang's dealmaking had concerned Wall Street. One investor described Kress as much more conservative and said she is unlikely to commit the same amount of money to keep the early-stage ecosystem going. Nvidia is expected to be more selective in new companies it backs and to write smaller checks into its existing portfolio, contributing to a drop in valuations.
Nvidia's biggest bets went to neoclouds, inference providers and open weight models, which are expensive for smaller companies to build. Zain Javaid, co-founder of the hardware company Ghost, said Huang's initiatives are a big reason an ecosystem emerged despite that. Nvidia backed CoreWeave while it was still private and participated in two of Crusoe's rounds, including its $1.4 billion Series E. It bought Hugging Face this year for $13 billion, in a deal expected to close in 2027, and holds investments in Mistral AI, Lambda and Black Forest Labs. Last year it wrote an $800 million check into a $2 billion Series B round for Reflection AI, before the open source startup began to earn meaningful revenue, according to the Wall Street Journal.
Bankiya said Huang believed in open source and in Europe, and that the end of that support outside America would be a massive funding and ecosystem gap no one can fill. Nvidia's practice of backing many companies with generous checks effectively locked those startups into using its chips, reinforcing its market position; a more conservative posture could leave room for rivals and smaller competitors. Some investors hope large cloud companies and other chipmakers step in.
Dharmesh Thakker, a general partner at Battery Ventures, expects Big Tech rivals to compete for Nvidia's investment crown depending on who offers the best combination of product, ecosystem and community to compete with CUDA, along with the financial power to bankroll the ecosystem. He doubts they will pour hundreds of millions into pre-revenue infrastructure startups the way Nvidia did. Padval said that when Nvidia was on the cap table everyone felt safe, and investors say traditional VCs may now think twice before writing checks or pause dealmaking. Few believe the slowdown alone will halt the broader AI boom; Amulya Vishwanath, a former Nvidia employee who now runs her own VC fund, said founders and leaders must be held accountable and that the ecosystem is bigger than one person.
More company and startup news from TechManNews.
