Nvidia’s Pivotal Role in Fueling the $306 Billion AI Startup Surge

Between Q1 2023 and Q1 2025, venture capitalists poured approximately $306.5 billion into artificial intelligence and machine learning startups, with U.S. companies receiving nearly $230 billion of that total, according to data from PitchBook. This represents nearly half—48%—of all venture capital activity in the United States during that time period.

At the center of this surge is Nvidia. The company’s graphics processing units (GPUs), originally designed for gaming, have become essential infrastructure for AI model training and deployment. As the demand for large-scale computing grew with the rise of generative AI tools like ChatGPT, Nvidia’s chips emerged as the gold standard, enabling startups and established firms alike to scale rapidly.

The impact is especially evident in the first quarter of 2025, when global AI and machine learning funding reached $76.5 billion—more than 70% of the total venture capital invested across all sectors that quarter. U.S. AI firms secured $66 billion alone in that period.

Nvidia’s involvement in AI dates back to the early 2000s when researchers began leveraging GPUs to enhance computing efficiency. By 2011 and 2012, GPU-powered AI models were gaining traction in academia and Silicon Valley, laying the groundwork for breakthroughs like OpenAI’s ChatGPT, which launched in late 2022.

The success of these models triggered exponential growth in demand for AI infrastructure, further accelerating Nvidia’s dominance. Since ChatGPT’s debut, Nvidia’s stock has surged more than 670%, far outpacing the S&P 500’s 42% gain. Major tech players such as Microsoft and Meta are estimated to allocate nearly half and a quarter of their capital expenditures, respectively, toward Nvidia hardware.

This investment cycle has created a self-sustaining momentum—where infrastructure demand, capital inflows, and product-market validation continuously reinforce each other. Since early 2024, over 20,000 private AI-related deals have closed, adding another $330 billion to the sector.

Despite expected deceleration, Wall Street analysts anticipate strong results for Nvidia’s fiscal Q1 2026 earnings. Revenue is projected to climb 66% year-over-year to $43 billion, with adjusted earnings per share rising 44% to $0.88. While growth may normalize compared to previous quarters, Nvidia’s foundational role in the AI revolution remains secure.