Nvidia Plans $10 Billion Investment in Anthropic's Massive IPO

As artificial intelligence software tool maker Anthropic begins discussions with investors for an initial public offering that could reach a valuation of up to $1.4 trillion, chipmaker Nvidia plans to invest $10 billion in the company alongside the IPO.

This planned investment by Nvidia stands out as the largest among new financial commitments toward the artificial intelligence company. According to the investor prospectus, the chipmaker will commit approximately $10 billion immediately following the IPO, which corresponds to roughly 10 percent of the new cash the company expects to raise this month, including the IPO.

This investment is at a higher level than planned new investments by other major hardware and cloud service providers such as Microsoft and Taiwanese chipmaker TSMC. Alphabet, one of Anthropic's major existing backers, had already planned to invest $10 billion under a previous investment obligation. The class of shares the companies will purchase will not carry voting rights in Anthropic's corporate matters.

This investment decision coincides with a challenging period for Jensen Huang, the chief executive of Nvidia, which has become one of the most valuable companies in the world. On Sunday, Jensen Huang admitted to having a relationship with a Chinese businesswoman identified by US intelligence agencies as an operative, and the company's board of directors announced that an investigation into the matter would be launched.

Some of the world's largest fund managers hope that Anthropic's IPO will help compensate for the weeks-long decline in artificial intelligence stocks. Nvidia's shares had lost more than 20 percent of their value over the past week, wiping out more than $500 billion in market capitalization. A successful IPO by Anthropic raising up to $100 billion will also serve as a consolation for Nvidia, which sells chips to companies providing computing power to Anthropic, including SpaceX.