Nvidia Stake Drives Smaller AI Firms' Stock Prices: All You Need To Know

Nvidia allocated $147.3 million to Arm Holdings, a significant player in chip design. This move comes after Nvidia's unsuccessful attempt to acquire Arm in an $80 billion deal.

Nvidia acquired a stake in Nano-X Imaging, an Israel-based medical device company utilising AI software for report analysis.

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Smaller artificial intelligence (AI) firms experienced a surge in their stock prices on Thursday following revelations that Nvidia, the leading AI chipmaker globally, has taken stakes in them, shedding light on its growth strategy. This uptick underscores Nvidia's expanding influence within the AI sphere, buoyed by its rapidly growing market value, which has propelled it to become the third most valuable company in the United States.

Among its notable investments, Nvidia allocated $147.3 million to Arm Holdings, a significant player in chip design. This move comes after Nvidia's unsuccessful attempt to acquire Arm in an $80 billion deal, which faced regulatory hurdles two years ago. Despite Arm's recent surge of over 60 per cent due to a robust forecast, its shares experienced a slight dip of nearly 0.5 per cent on Thursday.

Nvidia's investment positions were disclosed in a 13F filing dated December 31, a regulatory requirement that provides insights into the investment activities of various entities, typically fund managers rather than public corporations.

More Cost-Effective AI Chips

As reported by Reuters, according to Gadjo Sevilla, an analyst at Insider Intelligence, Nvidia's diversified portfolio of investments suggests a strategy aimed at developing more cost-effective, specialised chipsets tailored for specific AI applications, contrasting with pricier general-purpose AI chips.

Recursion Pharmaceuticals, a biotech company, witnessed a 5 per cent increase in its stock value after Nvidia injected nearly $76 million into the firm. Nvidia had previously announced plans to invest in Recursion Pharmaceuticals to expedite the training of the company's AI models for drug discovery.

Additionally, Nvidia's investment of nearly $3.7 million in SoundHound AI, a developer of conversational voice assistants, caused a notable surge of 50 per cent in the latter's share price, which reached $3.33.

Furthermore, Nvidia acquired a stake in Nano-X Imaging, an Israel-based medical device company utilising AI software for report analysis, resulting in a significant increase of 52 per cent in Nano-X's shares.

Even TuSimple Holdings, a company specialising in autonomous driving technology that was recently delisted from the Nasdaq, secured a $3 million investment from Nvidia, further demonstrating the chipmaker's diversified investment strategy.