Nvidia has become one of the world’s largest corporate backers of technology companies as the value of its equity investments more than increased tenfold in the past year to $99 billion, and the chip giant is increasingly looking to tap into its huge capital reserves to boost the AI sector. compared to about $7 billion the previous year and about $2.2 billion two years earlier. The increase in value places Nvidia among the strategic investors with the largest technology holdings worldwide. The company still lags behind some more established tech firms, with Alphabet and Amazon posting more than $100 billion worth of equity investments in recent earnings. Capital has increasingly become a key piece for Nvidia. In August, the company announced partnerships with major investment firms aimed at mobilizing more than $500 billion in financing for Nvidia graphics processing units (GPUs) and said it would provide up to $105 billion of conditional credit support for an OpenAI data center in Ohio. Nvidia also announced Thursday that it plans to acquire AI startup Hugging Face for $12.9 billion. Frontier labs, neoclouds and companies creating novel software and technology for AI, in both the public and private markets, have received cash, and the value of Nvidia’s stock holdings has also been boosted by the skyrocketing rise in technology stocks. Nvidia made the investments to enhance its growth opportunities, cultivate its ecosystem and strengthen its competitive position, the company said in its earnings. “Nvidia has a clear interest in ensuring its customers and partners thrive to provide it with future business,” Ian Fogg, research director at CCS Insight, told CNBC. “Capital investments help companies innovate, but also give Nvidia a degree of control to encourage companies to take an Nvidia-related innovation path.” Securing positioningNvidia dominates the market for the most advanced chips used for AI, known as graphics processing units (GPUs). As a result, business has skyrocketed. The chip giant has seen its shares rise 33% over the past 12 months, and its revenue soared 106% to $96.2 billion in its fiscal second quarter. “In its most recent quarter, $48.7 billion of $96.2 billion in revenue came from the hyperscale segment, which includes the largest cloud players.” The company is taking steps including financing and capital investments to “increase customer range and create an AI ecosystem,” he added. “Some aim to support emerging cloud providers, others help Nvidia grow in new markets, such as telecommunications, for example, with Nokia’s $1 billion equity investment.” Frontier’s AI labs have been the biggest recipients of Nvidia’s waste of money. The chip giant’s chief financial officer, Colette Kress, told analysts on an earnings call that the company had invested “nearly $50 billion in cutting-edge AI labs.” More recently, in February, Nvidia said it would invest $30 billion in OpenAI as part of the company’s $110 billion funding round. While cutting-edge AI labs had “extraordinary” demand for computing, they were growing faster than balance sheets and credit profiles could support and were struggling to independently secure AI factory infrastructure, Kress added. “Nvidia is needed to help drive this flywheel.” Neoclouds, which buys Nvidia GPUs and then rents access to companies including Nebius and CoreWeave, has also courted the chip giant. In January, Nvidia invested $2 billion in CoreWeave and in March it was announced that Nebius secured a $2 billion investment. “By injecting capital directly into AI infrastructure financiers, specialized cloud providers and core modeling labs, Nvidia is providing these startups with the balance sheet strength to purchase tens of thousands of Nvidia GPUs,” Naveen Chhabra, principal analyst at Forrester, told CNBC. The company has also invested in nascent technology areas. Since March, Nvidia has committed at least $6.5 billion to companies developing photonics and optical technology, which uses light to transmit data and is considered a more efficient alternative to transferring data using electricity. Lumentum, Coherent and Marvell each received $2 billion in investments from the tech giant. “Optics/networking specialists like Coherent receive investments to ensure their tools, NVLink protocols, and layout engines remain strictly optimized for Nvidia’s architecture,” Chhabra said. “This creates high switching costs and protects the CUDA software moat against competing accelerators from AMD or in-house custom chips from cloud providers.” Nvidia has also seen its $5 billion investment in Intel soar to a value of $30 billion, while its stake in SpaceX was worth $21 billion in June. “As global demand for AI chips runs into physical supply constraints, particularly around high-bandwidth memory (HBM) and advanced packaging, Nvidia is using strategic capital positions, such as in domestic manufacturing options like Intel, to secure priority access to manufacturing, reduce concentration risk for Asian foundries, and stabilize supplies of key components,” Chhabra said. 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