Nvidia Considers Strategic Acquisitions to Bolster AI Dominance

Nvidia, flush with cash, looks to acquire new talent through mergers and acquisitions

Throughout its 31-years history, Nvidia has acquired multiple companies to enhance its existing capabilities and address new markets. The company sells boatloads of premium GPUs for AI and HPC use and has a lot of excess cash on hand. Nvidia continues to grow organically by hiring new employees, but the company is also considering buying other companies to acquire new talent and enter new markets. "We can also think about that in terms of our work, of bringing on great teams in some M&A [merger and acquisition] form that they come on board," said Colette Kress, chief financial officer of Nvidia, at the UBS Global Technology and AI Conference this week. "That is a great opportunity for us to do, and we will continue to work also in that area." Nvidia hasn't disclosed any specific plans for what companies it might pursue, for obvious reasons, but its strategic direction for vertical growth are pretty clear. Just a decade ago, the company only offered accelerators for supercomputers. With Ampere and Hopper, Nvidia began to offer DGX and HGX platforms that are effectively complete servers that can be deployed quickly. With Blackwell GPUs, the green company aims to offer full server racks. "Then it leads to thinking about new types of business models that we may want to add and focus on in new areas of AI and the support that we can do. Not only for, let us just say, building out software, but building out full systems for others, and we will be investing in that after we determine those types of investment. Our work is in terms of returning to shareholders," said Kress. Nvidia has previously acquired companies including 3dfx, MediaQ, ULi, Portal Player, Ageia, Icera, and Mellanox, just to name a few. While some of the acquisitions enhanced the company's graphics and platform capabilities, others opened the doors to new markets. However, the company's biggest takeover over -- the proposed acquisition of Arm -- did not happen due to regulatory challenges. Nvidia now has a team developing CPUs, though the company is significantly behind rivals when it comes to processors. It wouldn't be surprising if some of the M&A efforts focus on companies with talent in that specific area.

Nvidia eyes acquisitions with growing cash reserves By Investing.com

Nvidia Corporation (NASDAQ:NVDA), a leading developer of artificial intelligence chips, is considering the use of its increasing cash reserves to pursue mergers and acquisitions, according to statements made by the company's finance chief, Colette Kress. During the UBS Global Technology and AI Conference held in Arizona on Tuesday, Kress discussed the potential strategic uses of the company's funds. Kress highlighted the possibility of enhancing Nvidia's operations by integrating talented teams through mergers and acquisitions. This approach comes as a shift from the company's recent investment strategy. In 2024, Nvidia has participated in a number of joint investments with other firms in the AI space, rather than engaging in full acquisitions. These investments include collaborations with various AI-focused companies such as Grid.AI, SuperAnnotate AI, Xscape Photonics, OpenAI, Poolside AI SAS, and Wombo Studios. The last complete acquisition by Nvidia was of Run.ai, a company specializing in orchestrating and optimizing AI applications, which took place in August 2024. The consideration of mergers and acquisitions signals Nvidia's intent to further expand and strengthen its position in the rapidly growing AI industry. Nvidia's discussion of potential strategic moves aligns with its position as a key player in the AI sector, where mergers and acquisitions can provide opportunities for growth, innovation, and consolidation of expertise. The company's finance chief's comments at the conference suggest a proactive approach to capitalizing on Nvidia's financial resources to potentially enhance its competitive edge and market presence.

Nvidia CFO Says Chipmaker Could Spend Cash on M&A

The chipmaking giant would consider investing "in some M&A form," Kress said at the UBS Global Technology and AI Conference, according to a transcript provided by AlphaSense. "It leads to thinking about new types of business models that we may want to add and focus on in new areas of AI," Kress said. Nvidia, one of the two most valuable companies in the world, has seen insatiable demand for the its family of artificial intelligence (AI) chips, including its next generation Blackwell graphics processing units. The company ended its fiscal third quarter with $38.5 billion in cash, cash equivalents and marketable securities, up from $34.8 billion a quarter earlier. Nvidia shares were little changed intraday Tuesday but have rocketed 180% higher in 2024.