At the Morgan Stanley Technology, Media and Telecom conference in downtown San Francisco on Wednesday, Nvidia CEO Jensen Huang said his company’s latest investments in OpenAI and Anthropic will likely be its last in either, saying that once they go public as expected later this year, the opportunity to invest will close.
It could be that simple. While companies sometimes pile into companies until almost the eve of their public debuts in search of more upside, Nvidia makes money by selling the chips that power both companies — it’s not like it needs to outbid their returns by pouring even more money into either.
Nvidia, for its part, doesn’t offer much more on the matter. Asked for comment earlier today following Huang’s remarks, a spokesperson pointed TechCrunch to a transcript of the company’s fourth-quarter earnings call, in which Huang said all of Nvidia’s investments are “focused very squarely, strategically, on expanding and deepening our ecosystem reach,” a goal that its previous stakes in both companies have arguably achieved.
Yet a few other dynamics may also explain the retreat, including the circular nature of these arrangements 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 “kind of a wash,” noting that “Nvidia is investing $100 billion in OpenAI stock, and OpenAI says it will buy $100 billion or more of Nvidia chips.”
Growing concerns that such deals could create an investment bubble may explain why engagement fell. The investment, which Nvidia closed last week as part of OpenAI’s $110 billion round came in at $30 billion — a far cry from the earlier pledge. (Huang has already dismissed another popular theory — that there is bad blood between the two companies — as “nonsense.”)
Meanwhile, Nvidia’s relationship with Anthropic has seemed full of itself. Just two months after Nvidia announced a $10 billion investment in November, Anthropic CEO Dario Amodi took the stage in Davos and, without mentioning Nvidia directly, compared the actions of American chip companies selling high-performance AI processors to approved Chinese customers to “selling nuclear weapons to North Korea.” Practice
In retrospect, a comparison of nuclear weapons was the least. 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 surveillance in the home.
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Within hours of that announcement, OpenAI said it had struck its own deal with the Pentagon — a move that Antropisk has called “disingenuous,” and the public seems to see it the same way. Within 24 hours of the back-to-back announcements, Anthropics shot Claude to the top of the free app rankings on Apple’s US App Store, overtaking ChatGPT. (At the end of January, Claude was outside the top 100, according to Sensor Tower data.)
Where that leaves Nvidia is holding shares in two companies that are currently pulling in very different directions, potentially dragging customers and partners along for the ride.
Whether Huang saw any of this coming, given Nvidia’s web of partnerships, is impossible to know. But his stated rationale Wednesday for likely pulling the plug on future investments — that the IPO window closes the door on this kind of deal — is hard to understand how late-stage private equity actually works. What looks more likely is that this is an exit from a situation that has gotten really complicated, really fast.