Jensen Huang’s Departure Leaves a Major Gap in AI Startup Funding, VCs and Founders Say
Jensen Huang’s departure from Nvidia has left AI startup founders and investors concerned about a major source of funding disappearing. Huang, who co-founded and led the company for 33 years, stepped down this week. One neocloud founder described the news as “like a bomb went off.”
Nvidia has invested tens of billions of dollars in startups in recent years, joining 105 funding rounds in 2026 alone, often as the largest investor. Its backing helped support companies across the AI sector, from applications and cloud infrastructure to inference providers and open-weight models.
Investors say Huang personally drove many of the company’s major startup investment decisions. While some hope his eventual successor will continue that strategy, they do not expect it to resume soon. Interim CEO Colette Kress is viewed as more cautious, and Nvidia may scale back both the number and size of its investments.
The company’s portfolio includes CoreWeave, Crusoe, Mistral AI, Lambda, and Black Forest Labs. Nvidia also agreed to acquire Hugging Face for $12.9 billion, a deal expected to close in 2027. Its large investments often helped young infrastructure companies get started—and encouraged other investors to join at high valuations.
Nvidia’s support came with trade-offs. Startups it backed were often tied to Nvidia’s chips, reinforcing the company’s position in the AI market. If Nvidia becomes more selective, rivals such as Google, Amazon, Microsoft, and AMD could have an opportunity to expand their ecosystems. But investors doubt those companies will make the same scale of early-stage, pre-revenue investments Nvidia did.
Without Nvidia’s participation, traditional venture firms may hesitate to fund capital-intensive AI infrastructure companies. Investors also expect smaller rounds and lower valuations, particularly for startups that relied on Nvidia’s backing to secure additional capital.
Still, few believe a slowdown in Nvidia’s investments alone will end the AI boom. One former Nvidia employee and current venture investor said the ecosystem is larger than any one person, and that founders and talent will continue to build companies.
Related: Nvidia’s startup investment strategy · Nvidia confirms its planned Hugging Face acquisition
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