The landscape of venture capital has been dramatically reshaped by the burgeoning field of artificial intelligence, drawing unprecedented levels of investment into innovative startups. Central to this financial transformation is the pivotal role played by companies like Nvidia, whose advanced computing infrastructure has effectively powered the AI revolution.
The AI Investment Surge
Since the introduction of ChatGPT in late 2022, which significantly broadened AI’s mainstream appeal, a monumental surge in venture capital funding for AI and machine learning initiatives has been observed. Between the first quarter of 2023 and the first quarter of 2024, global investments in AI startups and private enterprises reached $306.5 billion. Of this, $230 billion was directed specifically towards U.S.-based companies, with AI and machine learning ventures capturing approximately 48% of all U.S. venture capital investments during this period.
PitchBook AI analyst Dimitri Zabelin highlighted that ChatGPT’s success demonstrated the scalability of large language models into viable products, igniting substantial investor interest. He further emphasized that Nvidia was crucial in providing the necessary computational foundation for this expansion. In a notable recent period, the first quarter of 2025, global venture capital funding for AI and machine learning surged to $76.5 billion, constituting over 70% of the total value across all venture capital deals. Of this, $66 billion was allocated to U.S. AI enterprises.
Nvidia’s Foundational Technology
While artificial intelligence has a long history, Nvidia’s Graphics Processing Units (GPUs) became central to its advancement in the early 2000s, proving superior to traditional Central Processing Units (CPUs) for AI tasks. By 2011-2012, Nvidia’s AI-enabled GPUs were drawing significant attention from academic circles and Silicon Valley, paving the way for innovations such as OpenAI’s ChatGPT in 2022, which catapulted AI into the public consciousness.
Market Dynamics and Performance
The impact of this technological shift is clearly reflected in market performance. Since ChatGPT’s launch, Nvidia’s stock has experienced an extraordinary ascent, climbing over 670%, starkly contrasting with the S&P 500’s more modest 42% increase during the same period.
The escalating demand for GPUs has cemented the perception that AI is a robust and enduring investment cycle. Major tech giants exemplify this trend; Bloomberg estimates indicate that Microsoft and Meta allocate approximately 47% and 25%, respectively, of their annual capital expenditures towards Nvidia’s chips. This surge has initiated a “flywheel” effect, fostering strong product-market fit, extensive infrastructure development, and accelerating capital inflows. Since the first quarter of 2024, private markets have witnessed the completion of over 20,000 artificial intelligence deals, accumulating a total value of $330 billion.
Upcoming Earnings Outlook
Looking ahead, Nvidia is scheduled to release its quarterly earnings on May 28. Analysts on Wall Street anticipate significant growth in earnings and revenue for the company’s fiscal 2026 first quarter (the April quarter), although they foresee a continued moderation in its overall growth trajectory.
David Thompson earned his MBA from the Wharton School and spent five years managing multi-million-dollar portfolios at a leading asset management firm. He now applies that hands-on investment expertise to his writing, offering practical strategies on portfolio diversification, risk management, and long-term wealth building.