Evidence that large VC rounds are getting very concentrated on AI (specifically the kind where you need to buy lots of NVIDIA gear).<p>Is this leaving good companies unfunded because they're not sufficiently "AI"?
That’s my main concern with the bubble as well. The economy functions better with diversity. There are so many industries that could use funding outside of tech and some that could use funding with some new tech approaches.<p>Just the sheer size of investment into a single idea should worry people. Diversity is very important.
> Evidence that large VC rounds are getting very concentrated on AI (specifically the kind where you need to buy lots of NVIDIA gear).<p>The most recent $1B+ funding rounds:<p>Zipline - Nov 5 - $1.5B<p>HUMAIN - Nov 3 - $2.6B<p>Fal - Nov 3 - $1.3B<p>OpenAI - Oct 31 - $11B<p>Kalshi - Oct 29 - $1B
There's a reason why every pre-existing startup has been slapping AI all over their products - it's basically the only way to get funding at the moment.<p>I think this has been a phenomenon since VC became a thing, there's always been trends and fads - CEOs have had to chase them even when it doesn't make sense for the product.<p>I think this is the most wide-scale one I can personally recall (although I presume dotcom boom was similar), but I remember through the 2010s every database startup having to chase the same ball-game. Everyone was doing NoSQL, then everyone was doing analytics etc. Of course now all those companies have AI-native, vector-embedding, RAG, MPCs slapped all over their products.
Anecdata but from my vantage this has been true for a decade, I imagine it is only more true today, but investors were nudging to add AI to products the entire time I’ve been in tech, and failure to do that was always flagged as a risk for funding rounds. Need to show “AI/ML in the pipeline” by the next funding round or x/y/z is out…
I'm cancelling my blockchain toaster startup, anyone up for investing in my AI toaster (powered by Nvidia)?
Do you have evidence that a non-AI company can be good?
Also evidence that Nvidia is funding its own customers and artificially boosting demand. What could possibly go wrong?
Before anyone screams "circular financing", it really isn't.<p>It's almost certainly about making sure that these startups use Nvidia stack.
nobody would scream circular financing because of this. it's only circular if those companies would then be investing (directly or indirectly) in nvidia.<p>this however does scream "manufactured demand" - if the terms of your financing dictates that the money is used to purchase your own product.
It can also be a way to make the numbers look bigger for everyone...<p>Rather than sell a GPU at $500, instead you put the price up to $2000 but then invest in a startup on condition 80% of the investment is used to buy your hardware at inflated prices.<p>Arguably this is what's happening to 'datacenter' GPU's which are far more expensive than consumer ones for similar performance.
<p><pre><code> nobody would scream circular financing because of this.
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Majority would actually. See comments to my post.<p><pre><code> this however does scream "manufactured demand" - if the terms of your financing dictates that the money is used to purchase your own product.
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This is nothing new. Intel Capital has invested $20b over its lifetime to boost Foundry and x86 ecosystem.<p>Salesforce Ventures has invested $7b in more than 700 companies to boost its ecosystem.<p>I didn't see people calling this manufactured demand or circular financing.
Sure but if Nvidia is funding these startups, isn’t it really still circular financing??
This reminds me a lot of the .COM startups in 2000 that were selling stuff to each other and once one failed, the whole chain would come down slowly. The scary part is the sheer amount of money that’s floating around now. In 2000 is was a few million here and there. Now it’s multiple billions.
See my post here: <a href="https://news.ycombinator.com/item?id=48874687">https://news.ycombinator.com/item?id=48874687</a>
Nvidia at this point is the new central bank of the tech world
Especially as long as demand is as high as it is.<p>I paid real money for the 4090. Real $2000
It's not circular financing, although Nvidia give startups investment money so they can give it back to Nvidia for hardware?
They're forecasting around $700b in revenue next year.<p>These investments are likely drop in a bucket. A rounding error.<p>What they're truly looking for is the next OpenAI and to make sure that company runs on Nvidia.
If it looks like circular financing and smells like circular financing it’s circular financing.<p>Nobody is under any illusions that most if not nearly all this money is for anything other than buying GPU compute.
I mean, it's not quite as blatant as Amazon investing AWS credits, but a significant portion of it is going to be returned to Nvidia as hardware purchases, so it's not not-circular...
Then it is then.<p>AI boosters always deny reality.
Isnt that... what circular financing often refers to?<p>If I invest in you and you use my stack and pay me for it. It's circular. I don't think it should be illegal to do this type of vendor financing/investment or what not as it has its legitimate uses.<p>But it is circular.
The money that Nvidia gives to these companies hardly make a dent in Nvidia's total revenue.<p>It's just to make sure the next OpenAI uses Nvidia stack.
None of this refutes the circular nature of it all, though.
So you’re arguing it <i>is circular</i> but it’s only a little bit of money compared to Nvidia revenue so it doesn’t count?
Yes so advertising and vendor locking. Which brings money back to them. Hence circular.
When people accuse AI companies of circular financing, they meant it as a way to juice up their financial reports.<p>This is not the case. This is just having influence.<p>I don't think this locks the startup into Nvidia stack. I don't think this is advertising either. It's just influence.<p>Circular is not the word I use to describe this business tactic.
Yes but how many such isolated cases are there? There is a real possibility that a lot of the AI bubble is fuelled not by dealing with itself but by pulverizing influence all over the market.
It also makes everyone else’s success theirs. Personally I’m really happy to effectively be an LP in the Nvidia VC fund.
I don't think 1 loop is enough. You could remove the loop by just giving the GPUs directly as part of the investment. But investing in pure cash gives more flexibility especially in time where there may not even been spare GPUs able to be given away.
no, circular financing refers to it bouncing through several loops of that. the implication is that it’s system predators working the math, not the business. you should hear it in the same tones that bankers use the word leverage
Hey all, I run a funding-data API and I pulled every venture round of $100M or more from Oct 2025 to Sep 2026 that named its investors, we have 903 in total for this group.<p>And we found that Nvidia (or its venture arm) was in 79 of them. Sequoia was in 75 and a16z in 73. Nvidia on its own beat Lightspeed, General Catalyst and Accel.<p>Two other things that kinda surprised me was that counting rounds and counting dollars give different leaders.
So the average round Fidelity joined was $7.7B, against $3.5B for Sequoia and 38% of these rounds had a corporate investor, up from 35% the year before.<p>The obvious question is how much of this is Nvidia funding demand for its own chips. I'd like to hear from people who've been on either side of one of these rounds.
For what was until a few days ago the largest public company in the US, that doesn't sound unusual?
Still interesting to have concrete numbers on the phenomenon, I’d say.
Doesn't it? I would not expect the largest public companies to be the most active venture capitalists. The other 10 most active funders are all specialist investors, not standalone companies with venture arms. You have to go down to about #15 to find the next corporate investor, and it's not Microsoft or Apple or Saudi Aramco, but relative minnow Salesforce.
Looks like Jensen Huang has been making the rounds...
Bear with me.... Leverage and Insurance. Leverage against whom? US govt.<p>Maybe VCs and Private Equity funds represents what is essentially oligarchs. They are oligarchs as institutions. Everyone knows this already. US has certain liking to captialism as long as it is represented trough institutions and not individuals. Controversial I know, but standard oil, billy boy gates and monopoly trials, musk and spacex being public companies. It is just America.<p>So, NVIDIA figured out an interesting play. NVIDIA is playing a risky game where US govt can anytime say "fuck you, I hate you now". But if they embroil themselves in enough foundational businesses across america saying fuck you to them is difficult. Startups are " think of the children" corporate America.<p>They have become part of the oligarch class, they have invested where politicians childrens are working or lets be clear founded startups. This is not curricular economy, it is nvidia buying insurance. If they were read blooded America it would have been leverage, but this is insurance. Saying fuck you to them is progressively getting harder.<p>Any way my legs are frozen that is enough conspiracy theories I can write from the stall.