Nvidia (NVDA) Stock: Invests $150 Million in AI Inference Start-up Baseten

TLDR

• Nvidia invested $150 million in AI start-up Baseten as part of a $300 million funding round valuing the company at $5 billion
• Baseten specializes in AI inference, helping companies deploy and run large AI models
• AI inference workloads are expected to grow from 20-40% currently to 60-80% of total AI workloads within five years
• Nvidia is paying $20 billion to acquire Groq’s AI inference technology and employees
• The shift toward inference poses competitive challenges as other chip makers like Google and AMD can handle inference workloads

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Nvidia put $150 million into Baseten, an AI start-up focused on inference technology. The investment was part of a larger $300 million funding round that valued Baseten at $5 billion.

NVIDIA Corporation, NVDA

IVP and CapitalG, the venture fund of Google parent Alphabet, led the funding round. Baseten had previously raised $150 million in September 2025.

The company helps businesses deploy and run large AI models. Baseten CEO Tuhin Srivastava said the company aims to be “the invisible infrastructure behind the AI-first economy.”

This investment signals a major change in the AI market. Inference is becoming more important than training for AI workloads.

Analysts at Mizuho estimate that inference currently accounts for 20% to 40% of all AI workloads. They project that number will jump to 60% to 80% within the next five years.

The Inference Challenge

AI inference is when a trained model applies its knowledge to real-world tasks. This includes identifying objects, translating languages, and answering questions.

The shift toward inference creates both opportunities and challenges for Nvidia. Training AI models works perfectly with Nvidia’s graphics-processing units.

But inference might be handled just as well by competitors. Google and Advanced Micro Devices both offer AI processors that can handle inference tasks.

A range of chip start-ups are also entering the inference market. This puts pressure on Nvidia to maintain its dominance.

Nvidia’s Response Strategy

Nvidia isn’t sitting still. The company recently announced a massive deal with Groq, a privately held chip start-up.

Nvidia is paying $20 billion for Groq’s AI inference technology. The deal includes compensation packages for many Groq employees who will join Nvidia.

Baseten already works with Nvidia technology. The start-up provides support for Nvidia’s Nemotron 3 Nano, a high-efficiency AI model.

Baseten recently expanded its services to offer text-to-video inferencing in the U.S., Finland, and France. The company continues to build out its infrastructure for AI applications.

Nvidia shares rose 0.7% in after-hours trading following the Baseten news. The stock had closed down 4.4% during the regular session as technology stocks sold off broadly.

Wall Street analysts remain bullish on Nvidia with 39 Buy ratings, one Hold, and one Sell. The average price target of $263.44 represents potential upside of about 47% from current levels.

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