Nvidia (NVDA) recently took part in a $300 million funding round for Runway AI, a New York-based startup specializing in AI-powered video creation. The funding round, led by General Atlantic, also saw participation by Fidelity Management & Research Company, Baillie Gifford, and SoftBank.
Runway is known for its cutting-edge AI tools that enable video and image generation. The company recently launched its Gen-4 AI model, which keeps characters, places, and objects consistent across scenes, opening new possibilities for storytelling. With the new capital, Runway plans to expand its AI research and bolster its Runway Studios, an AI-powered film and animation production arm.
Here’s How This Investment Benefits NVDA
This investment is part of NVDA’s long-term strategy to expand its influence in AI-driven industries. Also, NVDA’s investment allows it to work closely with Runway, opening the possibility to integrate its technologies into Nvidia’s platforms and boost its AI capabilities.
Finally, supporting startups like Runway helps Nvidia enter emerging markets, such as AI-driven media production, thereby expanding its influence and customer base. This move strengthens Nvidia’s position in the AI industry but keeps it well poised to drive AI innovation.
NVDA Invests Heavily in AI Startups
Nvidia has been actively investing in AI startups to expand its presence across key AI sectors, including generative AI, autonomous vehicles, and cloud computing.
Most importantly, NVDA contributed $100 million to OpenAI in October 2023 to support progress in generative AI. Also, Nvidia joined a $6 billion funding round for Elon Musk‘s xAI, which focuses on AI research and development. Other noteworthy startups backed by Nvidia include Inflection AI, Wayve, CoreWeave, and Scale AI.
Is Nvidia a Buy, Hold, or Sell?
Turning to Wall Street, NVDA stock has a Strong Buy consensus rating based on 38 Buys and four Holds assigned in the last three months. At $174.78, the average Nvidia price target implies a 71.69% upside potential.
