Nvidia To Invest $137M In Tokyo-Based Sakana AI, Becoming Major Shareholder In The Startup

NVIDIA Corp. NVDA is set to pick up a stake in Tokyo-based startup Sakana AI, making it a significant shareholder.

What Happened: Sakana AI announced its Series A funding round, raising approximately 20 billion yen ($137 million). Nvidia appears to be the largest contributor, reported Nikkei Asia on Wednesday.

Founded in July 2023, Sakana AI is the fastest startup in Japan to achieve unicorn status. The company specializes in small-scale generative AI models, which are cost-effective and energy-efficient compared to larger models from companies like OpenAI and Alphabet Inc.’s Google.

Nvidia’s investment will also include collaboration in research, development, and training of AI talent in Japan. Nvidia CEO Jensen Huang stated, “The team at Sakana is helping spur the democratization of AI in Japan by developing cutting-edge foundation models to automate and speed scientific discovery with Nvidia’s accelerated computing platform.”

Other investors in this round include U.S. venture capital firms New Enterprise Associates, Khosla Ventures, and Lux Capital. In January, Sakana AI raised about 4.5 billion yen from NTT Group, Sony Group, and others, according to the report.

Nvidia and Sakana AI did not immediately respond to Benzinga's request for comment.

See Also: Nvidia Stock Loses The Value Of McDonald’s, Disney, Coinbase Combined Since Q2 Earnings: AI Darling’s Decline Continues Tuesday

Why It Matters: Nvidia’s investment in Sakana AI comes at a time when the company’s stock has nosedived, eroding nearly $300 billion in market capitalization. Despite the downturn, Deepwater Asset Management's managing partner Gene Munster remains optimistic about AI’s transformative potential.

Moreover, Jim Cramer recently cautioned investors against panic-selling Nvidia shares following a Justice Department subpoena over monopolistic practices.

Earlier this year, Nvidia made other significant acquisitions, including the purchase of Shoreline.io for $100 million in June and Run:ai for approximately $700 million in April. These moves indicate Nvidia’s ongoing efforts to bolster its AI capabilities and reduce reliance on major revenue sources like Microsoft Corp. and Amazon.com Inc.

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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote