Nvidia’s $1B AI Investment Overshadowed by Potential $1B Fine in China

• Nvidia, the world’s second-most valuable company, invested $1 billion across 50 start-up funding rounds and a number of corporate deals in 2024.
• The deals mark an increase from 2023, which saw the company invest $872 million.
• Nvidia’s investments threaten to be overshadowed by a probe from China’s antitrust watchdog, which could result in a fine of up to $1 billion.

Throughout 2024, Nvidia invested $1 billion in tens of AI companies as it solidified itself as a key backer of new start-ups looking to capitalize on the AI boom.

The world’s second-most valuable company, whose semiconductors power most of the AI industry, saw its market cap exceed $3 trillion in June.

However, a potential $1 billion fine from a Beijing antitrust probe risks casting gloom over Nvidia’s 2024 investments – and highlights the close eye global regulators are keeping on the semiconductor giant.

Nvidia Invested $1 Billion Into Start-Ups

Over the past twelve months, Nvidia has spent approximately $1 billion across 50 start-up funding rounds and several corporate deals, the Financial Times reported .

The investments mark an increase from 2023 when the company spent $872 million across just 39 start-up funding rounds.

Nvidia’s increased spending is a direct response to the explosive demand for AI technologies and its growing implementation across industries.

By investing heavily in AI start-ups and corporate partnerships, Nvidia is not only strengthening its ecosystem but also ensuring its products remain at the forefront of technological capabilities.

Although tech companies have been spending billions on Nvidia’s cutting-edge chips throughout 2024, some are beginning to look to reduce their reliance on them.

Big Tech companies such as Microsoft, Amazon, Meta, and Tesla are all looking to develop their own custom chips to become more independent in the AI space.

If this trend continues, Nvidia’s decision to invest in smaller AI companies will become even more crucial to maintaining its revenue.

Potential $1 Billion Antitrust Fine

In December, reports  claimed that a Chinese antitrust watchdog probe could result in a fine of up to $1 billion for Nvidia.

According to China’s State Administration for Market Regulation, the antitrust probe applies the country’s antimonopoly law to Nvidia’s 2019 acquisition of Israeli-based solutions provider Mellanox Technologies.

Despite granting “conditional” approval for the deal in April 2020, China has reopened a probe after Nvidia restricted exports of its semiconductors to the country to comply with U.S. regulations.

The probe marks the first time China has reopened scrutiny on a closed deal.

Nvidia’s Scrutinized by Watchdogs

As Nvidia continues to soar in success and wealth, so does government scrutiny worldwide.

The company’s massive investments across the industry, which totaled significantly more than Microsoft and Amazon in 2024, have put it in the firing line of global regulators.

Many regulators, including those in the U.S., China, and Europe, have raised concerns over Nvidia’s grasp of the AI industry.

Former chair of the U.S. Federal Trade Commission Bill Kovacic, as reported by the Financial Times, said antitrust watchdogs wanted to investigate a “dominant enterprise making these big investments” to see if buying company stakes was aimed at “achieving exclusivity.”

Nvidia denied any claims that its investments were tied to exclusive hardware usage, stating it was “working to grow our ecosystem, support great companies, and enhance our platform for everyone.”

It added, ” We compete and win on merit, independent of any investments we make.

“Every company should be free to make independent technological choices that best suit their needs and strategies.”