Jensen Huang’s resignation after 33 years as Nvidia’s co-founder and CEO has left a major funding gap for AI startups, investors and founders say. Nvidia’s large-scale, founder-friendly investing — reportedly tens of billions of dollars annually and participation in 105 rounds this year, often as the largest investor, according to PitchBook — was driven in large part by Huang, and his departure removes one of the ecosystem’s most active backers.
“It’s like a bomb went off,” one neocloud founder said upon hearing the news, summarizing the immediate reaction from some within the startup community. Investors warn that Huang’s absence could significantly affect dealmaking, valuations and competition as Nvidia rethinks its investment posture.
Jensen Huang’s role in Nvidia’s startup investments
Most of Nvidia’s major startup investment decisions, several investors say, were personally driven by Huang. Umesh Padval, managing partner at Seligman Ventures, said that many significant choices to invest often came from Huang himself. Dawn Capital’s Shamillah Bankiya added that “Nvidia is carrying almost every AI-native startup from application to neocloud,” underscoring how central Nvidia’s capital and strategic support had become for many companies.
Those investments covered neoclouds, inference providers and open-weight model efforts — areas that require expensive infrastructure and were often beyond the means of smaller companies. “Jensen’s initiatives are a big reason an ecosystem has emerged despite that,” said Zain Javaid, co-founder of the hardware company Ghost.
Immediate examples and scale of Nvidia’s bets
Nvidia backed CoreWeave while it was still private and participated in multiple rounds for Crusoe, including its $1.4 billion Series E. This year Nvidia bought Hugging Face for $13 billion, a deal expected to close in 2027, and holds investments in Mistral AI, Lambda and Black Forest Labs. Last year, Nvidia wrote an $800 million check into a $2 billion Series B for Reflection AI before the startup had meaningful revenue, according to the Wall Street Journal.
Maria Davidson, founder of Relational Capital, said, “If that direction changes, it’ll be a big blow to so many young companies,” highlighting the risk if Nvidia reduces its level of commitment.
How Nvidia’s strategy shaped the market — and the possible fallout
By frequently leading rounds and writing large checks, Nvidia effectively made many startups dependent on its chips and cloud relationships, reinforcing Nvidia’s market position. Several investors expect Nvidia’s interim CEO, Colette Kress, to take a more conservative approach to startup investments. “She’s much more conservative,” one investor said. “I don’t think she’s going to commit the same amount of money to keep the early-stage ecosystem going.”
If Nvidia scales back large, early-stage investments, investors say that could create room for rivals and smaller competitors — but also a funding gap that may be hard to fill. Some expect large cloud providers and other chipmakers to compete for influence and back mature startups to drive adoption of their chips and clouds. Battery Ventures general partner Dharmesh Thakker said Big Tech rivals will 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.”
Still, Thakker expressed doubt that those companies will match Nvidia’s pattern of pouring hundreds of millions into pre-revenue infrastructure startups. Under Huang, infrastructure companies that needed $100 million to $500 million in GPUs often raised roughly half that from Nvidia at high valuations, one VC said, with Nvidia’s participation giving other investors comfort to follow.
Without Nvidia on the cap table, Padval said, “everyone felt safe,” and now traditional VCs may think twice or pause dealmaking, contributing to potential valuation drops. Even so, several people quoted in the reporting do not believe Nvidia’s investment slowdown will, by itself, stop the broader AI boom.
Responses from founders and investors
Some investors worry the loss of Huang’s active sponsorship, especially for companies outside the U.S., will create “a massive funding and honestly ecosystem gap that no one can fill,” Bankiya said, noting Huang’s support for open source and European AI efforts. Others urged accountability and resilience: Amulya Vishwanath, an ex-employee of Nvidia who now runs her own VC fund, said that “founders and leaders must be held accountable,” and that the ecosystem is larger than one person and “that talent will, and must, continue to thrive.”
