Venture capital investment in artificial intelligence (AI) and machine learning startups has exploded since ChatGPT debuted in November 2022. From Q1 2023 through Q1 2025, investors poured $306.5 billion into AI ventures worldwide, $230 billion of which went to U.S. companies.
During this period, AI and machine learning firms made up 48% of all U.S. venture capital deals.
Nvidia’s GPUs at the Heart of the AI Boom
“ChatGPT’s success proved large language models could become real products,” said PitchBook AI analyst Dimitri Zabelin. “Nvidia provided the computing backbone that made it possible.”
AI has existed for decades, but its rapid rise traces back to academia and Silicon Valley using Nvidia’s graphics processing units (GPUs) instead of traditional CPUs. Early tests in 2011–2012 showed GPUs were far more efficient for AI tasks. When OpenAI launched ChatGPT in 2022, it pushed AI into the mainstream—and sent Nvidia’s stock soaring over 670%, compared to a 42% gain in the S&P 500.
First Quarter 2025: AI Dominates VC Deals
In Q1 2025 alone, global venture capital investment in AI and machine learning reached $76.5 billion, accounting for more than 70% of all VC funding in that quarter. U.S. AI companies captured about $66 billion of that total.
“That surge in GPU demand confirms AI is a long-term investment cycle,” Zabelin said. Bloomberg estimates show Microsoft and Meta spend roughly 47% and 25% of their annual capital budgets on Nvidia chips, respectively.
Flywheel Effect: Deals, Infrastructure, and Growth
The rush for AI chips has created a “flywheel” effect: more funding drives faster product development, which in turn attracts more capital. Since Q1 2024, private markets have completed over 20,000 AI deals worth $330 billion.
Earnings Preview: Nvidia Reports on May 28
Nvidia will release its Q1 fiscal 2026 results on May 28. Wall Street analysts expect revenue of $43 billion, up 66%, and adjusted earnings per share of $0.88, up 44%. These figures follow an extraordinary year-ago quarter, which saw 262% revenue growth and 461% EPS growth.
Options traders tracked by Bloomberg anticipate Nvidia’s shares could move up or down by 7% after the earnings announcement.
