Alphabet and Nvidia have invested in Safe Superintelligence (SSI), an AI startup co-founded by former OpenAI chief scientist Ilya Sutskever.

The startup is valued at US$32 billion after its latest funding round led by Greenoaks.

Alphabet’s cloud division will provide SSI with access to its tensor processing units (TPUs), signaling a shift in its strategy to expand TPU sales externally.

Nvidia, which dominates the AI chip market, also participated in the funding.

SSI, which requires substantial computational resources, primarily relies on Google’s TPUs, despite the widespread use of Nvidia’s GPUs in AI development.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Tech giants’ dual strategy: Invest in AI startups that become major chip customers

Alphabet and Nvidia’s investments in SSI represent a strategic pattern where tech giants simultaneously invest in AI startups while selling them computing infrastructure.

This approach creates a beneficial cycle: their investments help AI startups scale faster, which in turn drives demand for the investor’s chips and cloud services 1.

Google’s deal to sell TPUs to SSI mirrors similar arrangements with Anthropic, where Google invested billions while also becoming their infrastructure provider 2.

This pattern is evident across the industry. For instance, Microsoft invested heavily in OpenAI while becoming their exclusive cloud provider, and Amazon backed Anthropic while promoting their Trainium chips 3.

By 2024, AI accounted for nearly 33% of all global venture funding, with big tech playing an increasingly important role as both investors and infrastructure providers 1.

This dual strategy gives tech giants visibility into emerging AI capabilities while ensuring their hardware remains central to the AI computing landscape.

2️⃣ The broadening battlefield in AI chips challenges Nvidia’s dominance

SSI’s preference for Google’s TPUs over Nvidia’s GPUs represents a competitive shift in the AI chip market.