Jensen Huang's Exit Leaves $Billions Hole in AI Startup Funding

Nvidia participated in 105 startup funding rounds this year alone, often as the largest check-writer — and that spigot is now at risk after CEO Jensen Huang, who co-founded and led the company for 33 years, officially stepped down.

"It's like a bomb went off," one neocloud founder told TechCrunch on hearing the news. Huang's absence leaves the startup ecosystem without one of its biggest champions, and with far less capital for now, investors say — with knock-on effects for dealmaking, valuations, funding and competition.

Over the last several years, Nvidia has poured tens of billions into startups annually, according to PitchBook. "If that direction changes, it'll be a big blow to so many young companies," said Maria Davidson, founder of Relational Capital.

"Nvidia is carrying almost every AI-native startup from application to neocloud," Dawn Capital's Shamilla Bankiya told TechCrunch.

Who actually made the investment calls?

Most of the significant decisions to invest in startups came from Jensen himself, according to Umesh Padval, managing partner at Seligman Ventures. Padval has known Huang since serving on the board of Mellanox Technologies, the networking chipmaker Nvidia acquired for approximately $7 billion in 2020.

There's hope that Huang's eventual successor will resume his dealmaking spree. Investors aren't hopeful it happens soon. Nvidia's interim CEO, Colette Kress, is expected to institute changes — especially around Nvidia's investments in AI startups at the crux of the billion-dollar data centre build-out, a sphere where Huang's rampant dealmaking had already worried Wall Street.

"She's much more conservative," one investor said of Kress. "I don't think she's going to commit the same amount of money to keep the early-stage ecosystem going."

What did Nvidia actually back?

Nvidia's biggest bets were neoclouds, inference providers and open weight models — capital-intensive categories that smaller companies struggle to fund. "Jensen's initiatives are a big reason an ecosystem has emerged despite that," said Zain Javid, co-founder of hardware company Ghost.

The record is concrete:

• Nvidia backed CoreWeave while it was still private, and participated in two of Crusoe's rounds, including its $1.4 billion Series E.
• It agreed to buy Hugging Face this year for $13 billion, a deal expected to close in 2027.
• It holds investments in Mistral AI, Lambda and Black Forest Labs.
• Last year it wrote an $800 million check into a $2 billion Series B for Reflection AI, per the Wall Street Journal — before the open-source startup earned meaningful revenue.

Nvidia was often the largest investor in those deals.

What happens to Europe and open source?

"Jensen believed in open source and frankly speaking, Europe," Bankiya said. If that support outside America stops, "it would be a massive funding and honestly ecosystem gap that no one can fill."

There's a second-order effect, too. Nvidia's generous checks effectively locked backed startups into using its chips, reinforcing its dominant market position. A more conservative Nvidia could open room for rivals — Google, notably, announced two new chips this week amid Huang's Nvidia fallout.

Will anyone fill the void?

Some investors hope large cloud companies and other chipmakers step in. Dharmesh Thakker, general partner at Battery Ventures, expects big tech rivals to vie for Nvidia's investment crown, "depending upon who brings the best combination of a great product, an ecosystem and community to compete with CUDA, and the financial power to bankroll the ecosystem." CUDA is Nvidia's software platform that lets developers run AI models on its GPUs.

But he doubts Google, Amazon, Microsoft or AMD will pour hundreds of millions into pre-revenue infrastructure startups the way Nvidia did. They'll likely back mature companies to drive adoption of their own chips and clouds.

That matters. Under Huang, infrastructure companies needing $100 million to $500 million in GPUs would often raise half that amount from Nvidia at valuations of $1 billion or more just to get started, one VC said — and Nvidia's participation gave other investors the comfort to follow at those lofty valuations.

Now Nvidia is expected to be more selective with new bets while writing smaller checks into its existing portfolio, contributing to a drop in valuations. "When Nvidia was on the cap table, everyone felt safe," Padval said. Without that backing, traditional VCs are likely to think twice — and may even pause certain deals.

Even so, few believe Nvidia's slowdown alone will halt the broader AI boom. Amulya Vishwanath, a former Nvidia employee who now runs her own VC fund, put it plainly: "founders and leaders must be held accountable," and the ecosystem is bigger than one person. "That talent will, and must, continue to thrive."