Nvidia last week it made more AI waves by acquiring not one, but two startups in the industry.
The chip giant, which has made dozens of investment deals in the AI space, announced that it has made a purchase Run: you’ve got got it For reported 700 million dollars. It was also reported that it bought So there you have it. Startups help firms develop AI models more cheaply.
It happened a lot of evaluation of those deals, but they make us reflect on what the AI market has seen since then in terms of mergers and acquisitions ChatGPT appeared on the scene a yr ago. While everyone normally looks at funding numbers (which we recently did), what about the numbers that VCs and other investors actually make money on?
Mergers and acquisitions involving VC-backed AI startups actually saw significant growth in the first quarter after ending on a down note last yr. In the first quarter, 55 such startups accomplished mergers and acquisitions, in keeping with Crunchbase data — in comparison with just 38 deals in Q4 2023.
The largest deal announced this quarter for an artificial intelligence startup was a service company Veradigm buys in Boston ScienceIO — which developed a biomedical language platform for transforming medical texts into data and insights — for $140 million.
This number for the first quarter of 2024 is barely lower in comparison with the 62 deals announced last yr in the same quarter, but it is not a large difference.
It’s probably not surprising that deal volume is somewhat low in the AI space immediately. This probably has to do with a variety of things, corresponding to the entire M&A market still looking for a recovery after rising rates of interest have cooled the market, and also the many VC-backed AI startups that have sky-high (exceeded?) valuations could hold onto buyers. out of the way.
Nevertheless, the uptrend is something investors actually prefer to see. They are already here questions as to how some startups will find a way to compete in the market, and while the IPO market could also be opening up, few AI startups are mature enough to go down this route.
Entering into mergers and acquisitions offers investors a very real path to showing real profits over the course of several difficult years for the enterprise in this respect. Thanks to personal equity and strategies like Microsoft and Nvidia flush with money (Nvidia has essentially doubled its money holdings and short-term investments to only $26 billion over the past 4 quarters), it appears the upward trend in deals may proceed.
Things that caught our eye and more:
- This week, an artificial intelligence company Błażej announced that it has raised $106 million from firms corresponding to Franklin Templeton, Mercedes-Benz, Temasek and others. The El Dorado Hills, California-based startup specializes in edge computing in the automotive, mobility, smart retail, security, industrial and metro markets. What makes this deal interesting is that Blaize also said last December that it might go public via a SPAC deal with BurTech Acquisition, so it could have more financing on the way. Blaize previously raised $224 million for the company.
- It seems that AI coding startups are now attracting investor attention. Last week, each based in Palo Alto, California Increase and based in San Francisco Cognition each raised $227 million and $175 million, respectively. Several well-known investors took part in these rounds, including: Sutter Hill’s ventures, Index ventures, Partners of the Lightspeed enterprise AND Founders Fund. Given these names, AI coding assistance looks as if a specific area of interest to observe closely.