Investors need to keep a close eye on the AI newcomers that Nvidia has spent tens of billions on, to fuel the wider artificial-intelligence ecosystem, to see if the bet pays off.
Nvidia shares were down 0.2% at $28.93 in premarket trading, showing a muted reaction to Elon Musk's SpaceX reportedly planning to raise $40 billion to spend on its hardware. The stock this week marked its first record close since May.
To keep rising, Nvidia needs more customers who might conceivably spend like SpaceX in future. One of the candidates is Nvidia-backed cloud-computing company Lambda.
Lambda is raising up to $4 billion in a final round of fund-raising before the company's initial public offering, The Wall Street Journal reported Tuesday, people familiar with the matter. The funding will give the company a valuation of $14.5 billion.
The ultimate goal for Nvidia would be for Lambda grow into another large public 'neocloud' company like CoreWeave, which is closely tied to Nvidia and largely dependent on its chips. Lambda had a backlog of $50 billion in September this year, according to the WSJ. By comparison, CoreWeave had a sales backlog of about $104 billion as of June 30, with an additional $25 billion deal signed early in the third quarter. CoreWeave has a market value of just over $50 billion.
Nscale, another Nvidia-backed cloud computing company, filed for an IPO in September. Nscale had a contract backlog of about $103 billion as of August, and was last valued at $14.6 billion.
Another company to keep an eye on is French AI start-up Mistral, which Nvidia has also invested in. Mistral just released a public preview of its Mistral Large 4 model on Tuesday. The model was trained on about 4,000 Nvidia Grace Blackwell graphics processing units. That's not very impressive compared with SpaceX's plans for more than a million Nvidia chips, but Mistral is the leading European AI model developer and has a valuation of more than $24 billion.
Not every Nvidia customer can be SpaceX but if even a few of its AI ecosystem bets pay off, it will help secure the company's long-term future.