AI startups brace for less Nvidia cash after Huang exit

Jensen Huang's resignation from Nvidia ↘ 2.01% has founders and venture investors preparing for smaller checks and lower valuations. The chipmaker had become one of the most active backers of AI startups, and much of that money came at Huang's direction. Nvidia's board said on Thursday, November 12, that Huang had resigned as president, CEO and board member, effective immediately. CFO Colette Kress will serve as interim CEO while the board searches for a permanent successor, according to the company's announcement. He left after reports of extramarital affairs, including one with a woman U.S. officials allege is a Chinese spy, AFP reported.sec.gov+1

A pullback in dealmaking

Nvidia took part in 105 funding rounds this year, often as the largest investor, according to PitchBook data cited by TechCrunch. "Nvidia is carrying almost every AI-native startup from application to neocloud," Dawn Capital's Shamilla Bankiya told the outlet. Umesh Padval of Seligman Ventures said most of the major investment decisions came from Huang himself. One investor described Kress as "much more conservative" and said she was unlikely to "commit the same amount of money to keep the early-stage ecosystem going". NPR also noted that Kress has a finance background and appears more cautious about large bets.techcrunch.com+1

Theory Ventures' Tomasz Tunguz wrote that Huang left after Nvidia had put $61 billion in cash into AI startups and $42 billion into acquisitions, on top of $165 billion in lease and cloud guarantees. Tunguz also estimated that Nvidia made up 16.4% of U.S. venture dollars in the second quarter of 2026. One VC told TechCrunch that infrastructure startups needing $100 million to $500 million in GPUs would often raise half that amount from Nvidia at valuations of $1 billion or more. Investors now expect Nvidia to be more selective with new companies and to write smaller follow-on checks. Open-source developers are among the most exposed. "If I claimed this doesn't impact us, I would be dishonest," Nous Research's Dillon Rolnick told The Wall Street Journal News Corp ↗ 2.45%.tradersunion.com+2

Room for rivals

Some investors hope other companies will fill the gap. Battery Ventures' Dharmesh Thakker expects Google Alphabet Inc. ↘ 0.96%, Amazon Amazon.com, Inc. ↘ 0.29%, Microsoft ↗ 0.17% and AMD Advanced Micro Devices, Inc. ↘ 8.75% to back mature startups. He doubts they will put hundreds of millions into pre-revenue infrastructure companies the way Nvidia did.techcrunch.com

Venture investors in Israel, where Nvidia employs 6,000 people, see an opening for challengers. "Slower decisions at Nvidia could give competitors an opening, but if that uncertainty also slows AI spending, they could end up with a bigger share of a smaller opportunity," Yanai Oron of Vertex Ventures Israel told TechCrunch. Selah Ventures' Adi Levanon said challengers "now have a window to prove a different approach delivers better economics; a leadership change alone won't win them the business."techcrunch.com

Kress's first major test will come on Tuesday, November 17, when Nvidia reports third-quarter fiscal 2027 results.axios.com