In recent years, Nvidia, the leading AI chipmaker, has significantly increased its investments in startups, solidifying its position in the AI landscape. According to S&P Global and Crunchbase, Nvidia’s startup investments soared by 280% year-over-year from 2022 to 2023, with the company and its venture capital arm, Nvidia Ventures, participating in approximately 46 deals last year.
Nvidia isn't alone in this pursuit; its primary competitors in the AI chip market — AMD, Arm, and Intel — have also ramped up their investments in startups, aiming to capitalize on the booming generative AI sector.
We were intrigued to compare the investment activities of the top AI chipmakers — Nvidia, AMD, Arm, and Intel. We analyzed Crunchbase data to gain insights into their recent funding efforts through both the companies and their respective VC divisions.
Intel
Among Nvidia’s competitors, Intel boasts the most extensive startup investment initiative, primarily through Intel Capital, its long-established venture capital firm. In 2023, Intel Capital invested over $350 million in various startups, including notable names such as AI21 Labs, a competitor to OpenAI, Grip Security, Fly.io, and TuMeke.
Although Crunchbase data is not comprehensive, it indicates that Intel Capital participated in 32 startup deals in 2023, a decrease from 47 in the previous year. Intel also made direct investments in two emerging companies (Hugging Face and Twelve Labs) and a “non-equity” investment in payment infrastructure startup Tweed through its Ignite accelerator, resulting in a total of 34 deals in 2023, down from 47 in 2022.
It’s worth noting that while AI startups hold strategic significance in the chipmaking industry, they represent a smaller fraction of Intel’s venture capital portfolio. Software, IT, and enterprise SaaS companies dominate its startup holdings. However, this focus may shift as Intel aims to launch new software products, including GenAI solutions. Earlier this year, Intel spun out Articul8 AI to develop generative AI applications tailored for industries like aerospace, finance, telecommunications, and semiconductors.
Arm
Compared to Intel, Arm is less active in startup investments. The company primarily generates revenue by licensing its chip designs but has made several direct investments in addition to funding through Deeptech Labs, a VC fund and accelerator co-launched with the University of Cambridge, Cambridge Innovation Capital, and Martlet Capital.
In 2023, Arm made four direct investments in startups, including SiPearl, Kigen, and the Raspberry Pi Foundation, alongside six investments through Deeptech Labs. Beneficiaries of funding from Deeptech Labs included Nu Quantum (quantum networking), RoboK (3D sensing technology), and Perceptual Robotics (automated wind turbine inspection).
Overall, Arm invested in ten startups in 2023, a notable increase from just four in 2022, indicating a growing interest in innovative technologies, potentially including AI.
AMD
AMD operates its venture capital firm, AMD Ventures, to invest in startups, but their activity has been relatively sparse. Last year, AMD Ventures made a few key investments, participating in the Series A for Ethernovia, and investing in Essential AI and Moreh, while also collaborating with Intel and Nvidia on Hugging Face. In 2022, AMD only completed one deal with Radian Arc.
In 2023, AMD recorded a total of four investments, which is modest compared to its competitors. However, 2024 promises to be a transformative year for AMD, as they look to accelerate their investment pace. Matthew Hein, AMD’s Chief Strategy Officer of Corporate Development, indicated that AMD Ventures aims to increase its investment levels significantly, focusing on the AI ecosystem.
Furthermore, AMD is ramping up production of its MI300 AI chip for data center workloads and introducing its Ryzen 8040 mobile processors, both of which underscore the company’s commitment to the AI market.
In Conclusion
While Nvidia remains the frontrunner in startup investments within the AI chip sector, it’s evident that Intel, Arm, and AMD are actively working to close the gap. In the first three quarters of 2023 alone, Nvidia invested nearly a billion dollars in non-affiliated firms, a figure that even Intel Capital found challenging to match.
Dominance in the AI chip market doesn’t solely rely on cultivating a robust startup ecosystem, but Nvidia's aggressive investment strategy demonstrates its commitment to sustaining its leadership in this crucial sector. As the competition heats up, Nvidia's rivals will need to step up their efforts to keep pace.
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