Welcome to Eye on AI. Beatrice Nolan here. In today’s issue:This week, Nvidia CEO
Jensen Huang was in London as part of a European tour. Jeremy Kahn and I caught up with him to discuss AI safety, Nvidia’s bet on open source, AI regulation, his thoughts on AI doomers, and how he makes his tea. Spoiler: He’s not making the tea correctly.
The trip is part of a broader European charm offensive for Nvidia, and one that comes with a hefty checkbook. Before London, Huang began his European Grand Tour in Paris, where he met Emmanuel Macron, and Huang said Nvidia would unveil another $2 billion in European AI deals within a week. That’s on top of the roughly $8 billion the company says it has put into the continent over the past year.
In London, Huang announced Nvidia was taking minority stakes in five U.K. startups, alongside new deployments with local organizations—while also doing an excellent Oprah Winfrey impression.
“I am giving you money! And I am giving you money! And I am giving you money,” Huang shouted from a stage in an old converted church to a crowd of tech executives, venture capitalists, Nvidia employees, and British politicians.
At one point during the speech, Huang spotted Josh Payne, CEO of Nscale, a U.K.-based neocloud backed by Nvidia, in the crowd and took the time to tell him that he and his company were a “zero” before he came along, invested in them, and helped them recruit their board. Nscale is now about to go public, targeting a valuation
of up to $35 billion.Nvidia also committed $250 million worth of compute over five years to U.K. AI safety and security research, and more announcements are expected at Nvidia’s big GTC Berlin event next week. It’s a generous tour, but many of Nvidia’s investments fit a familiar pattern for the company, with much of the money likely to find its way back to Nvidia, either in direct purchases of its GPUs, or in terms of AI companies renting cloud capacity with data center companies that buy lots of Nvidia chips.
The startups it backs are hungry for expensive and scarce compute, and investing in them keeps them building on Nvidia’s chips and software, and makes it less likely they will switch to any rival hardware, such as Google’s TPUs or AWS’s Trainium and Inferentia chips. It also helps to position Nvidia as the default supplier for Europe’s “sovereign AI” push. The risk for Europe is that sovereignty ends up meaning dependence on a single American chipmaker.
In response to these concerns, Huang argued that sovereignty depends on who controls the data, service, and ability to advance the technology—not simply on where the chips are made. Nvidia, he said, can enable sovereignty by letting local providers operate its full-stack AI platform themselves.
“So long as you can operate the service yourself, that’s the most important,” he said.
Nvidia is now worth more to $5 trillion, and keeping that valuation going up may well depend on finding buyers beyond the handful of U.S. hyperscalers that still account for roughly half its data center sales. Nvidia’s
sovereign AI revenue is already growing, tripling to more than $30 billion last fiscal year.
Every national “AI factory,” as Huang likes to refer to data centers running AI workloads, and European startup training on Nvidia hardware is a customer that isn’t a hyperscaler like Microsoft or Meta. This growth helps reassure investors who worry that the whole AI boom rests on the capex budgets of a handful of Big Tech companies.
But the trip is also a smaller version of a strategy that has made some of those investors nervous. Nvidia increasingly funds its own customers, from its multibillion-dollar stakes in OpenAI and other AI labs, to reports in late July that it was weighing a guarantee for $250 billion in financing for an OpenAI data center in Ohio. That news knocked about 5% off its shares on July 27 and sent the cost of insuring its debt sharply higher. (Nvidia later cut the guarantee to about $105 billion.)
Critics call this circular financing: Nvidia invests in a startup, that company then buys Nvidia chips, and Nvidia books the revenue. It works as long as demand for AI keeps climbing. But if it stalls, Nvidia could be exposed twice, as a supplier and as a shareholder. For now, Huang is betting there’s enough demand to go around and that Europe, along with the rest of the world, will keep buying.
When asked about criticism of Nvidia’s investments in the AI ecosystem, Huang said the company invests “a small percentage of ultimately what the company has to raise” and is “highly informed” and “disciplined” about it. He also said that AI companies need more money than venture capital alone can provide.
“It is also strategically super smart to do because everybody we invest in is connected into Nvidia’s ecosystem, and so we’re making our platform more vibrant, and we’re able to reach into new markets we otherwise couldn’t,” he said.
As for the tea making, for any other curious Americans: it’s tea bag first, then water.
With that, here’s more AI news.
Beatrice Nolanbeatrice.nolan@fortune.com@beafreyanolan
