Nvidia's dominance in AI chips deters funding for startups
Nvidia's supremacy in building computer chips for artificial intelligence has chilled venture funding for would-be rivals, investors said, with the number of US deals this quarter falling 80% from a year ago.
The Santa Clara, California company dominates the market for chips that work with massive amounts of language data. Generative AI models get incrementally smarter through exposure to more data, a process called training.
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«Nvidia's continued dominance has put a really fine point on how hard it is to break into this market,» said Greg Reichow, a partner at Eclipse Ventures. «This has resulted in a pullback in investment into these companies, or at least into many of them.»
US chip startups have raised $881.4 million through the end of August, according to PitchBook data. That compares to $1.79 billion for the first three quarters of 2022. The number of deals has dropped from 23 to four through the end of August.
Nvidia declined to comment.
AI chip startup Mythic, which has raised about $160 million
