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Nvidia's dominance in AI chips deters funding for startups

Economic Times · 1y ago

Medial

Nvidia's dominant position in AI chip development has led to an 80% drop in venture funding for would-be rivals. Investors are increasingly cautious about backing new chip startups, which now face more stringent demands, like having a product ready for launch or generating sales. The high cost of advancing chip designs and Nvidia's continued dominance have made investors more risk-averse. Despite this, some startups have attracted investment by highlighting potential customers or their relationships with industry experts. Meanwhile, AI software and related technology startups have received significant funding this year, signaling a divergence in investment trends within the AI sector.