Smaller AI firms surge after chip giant Nvidia discloses stake (updated)

Nano-X Imaging

15/02/2024 13:55

(Rewrites throughout with analyst comment in paragraph 10,
background on Nvidia-Arm deal in paragraph 3)
    By Medha Singh
       Feb 15 (Reuters) - 
    Shares of five smaller AI firms surged on Thursday before
the bell after the world's most dominant artificial intelligence
chipmaker, Nvidia, disclosed stakes in them, offering clues on
its growth strategy.
  
        Nvidia's regulatory disclosure came close on the heels
of it becoming the third most-valuable U.S. company, fueled by a
rapid rise demand for its data center chips.
  
        Its largest investment of $147.3 million was in Arm
Holdings  ARM.O , the chip designer that Nvidia failed to buy
after the $80 billion deal hit the antitrust hurdle two years
ago.
  
        Nvidia had indicated interest in purchasing shares of
Arm during the British company's Nasdaq debut last year. 
  
        Shares of Arm that has said its processors complement
Nvidia's chips for AI work in data centers were up 2.1%. 
  
        Shares of biotech firm Recursion Pharmaceuticals
 RXRX.O , in which Nvidia invested nearly $76 million, gained
18.3%.
    Last year, Nvidia said it would invest in Recursion to speed
up training of the Salt Lake City, Utah-based firm's AI models
for drug discovery.
    The Silicon Valley megacap firm also invested nearly $3.7
million in conversational voice assistants developer SoundHound
AI  SOUN.O , sending its shares 23% higher. 
    It bought shares of Israel-based medical device company
Nano-X Imaging  NNOX.O , which uses AI software to analyze
reports. Nano-X shares rose 80% higher.
    Autonomous driving technology TuSimple Holdings  TSPH.PK ,
which delisted from the Nasdaq last week, also drew $3 million
in capital from the chipmaker.    
    "This is a way to collaborate with one of the smartest
people in the business.. and gives Nvidia CEO Jensen Huang the
opportunity to collaborate on projects moving forward," said
Thomas Hayes, chairman at Great Hill Capital.
    Nvidia revealed its new stakes as of Dec. 31 in a 13-F
filing with the U.S. SEC late on Wednesday.
    SoundHound shares were the most actively traded across U.S.
stocks trading before the bell, with 29 million shares changing
hands by 8:05 a.m. ET, nearly three times its 25-day moving
average, according to LSEG data.
    Shares of other small-cap chipmakers rose in tandem, with
C3.ai  AI.N  adding 1.4% and BigBear.ai Holdings  BBAI.N 
gaining 7.3%.

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Nvidia surpasses Alphabet after overtaking Amazon Nvidia
surpasses Alphabet after overtaking Amazon    https://reut.rs/3HYHvY3
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 (Reporting by Medha Singh in Bengaluru, Additional reporting by
Bhanvi Satija and Johann Cherian; Editing by Krishna Chandra
Eluri and Arun Koyyur)
 ((Medha.Singh@thomsonreuters.com; +91 80 6210 0592; X, formerly
Twitter: @medhasinghs;))