Nvidia (NVDA) Stock: Chip Leader Invests $150M in Baseten as AI Inference Grows

TLDR

• Nvidia contributed $150 million to Baseten’s $300 million funding round at a $5 billion valuation
• Baseten focuses on AI inference infrastructure for deploying large AI models
• Inference workloads projected to jump from 20-40% to 60-80% of AI tasks over five years
• Nvidia acquiring Groq’s inference technology for $20 billion to stay competitive
• The move addresses growing competition from Google and AMD in the inference market

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Nvidia backed AI start-up Baseten with a $150 million investment. The funding was part of a $300 million round that valued Baseten at $5 billion.

NVIDIA Corporation, NVDA

Technology venture capital firm IVP led the round. CapitalG, the venture arm of Alphabet, also participated.

Baseten specializes in AI inference infrastructure. The company helps businesses deploy and operate large AI models at scale.

This marks Baseten’s second major funding in less than a year. The start-up raised $150 million in September 2025.

CEO Tuhin Srivastava described Baseten as future infrastructure for an AI-driven economy. The company recently launched text-to-video inferencing services in the U.S., Finland, and France.

Why Inference Matters

The investment highlights a critical shift in the AI industry. Inference is quickly becoming more important than model training.

AI inference applies trained models to real-world applications. This includes image recognition, language translation, and question answering.

Mizuho analysts estimate inference currently represents 20% to 40% of AI workloads. They expect that figure to reach 60% to 80% within five years.

The transition creates pressure for Nvidia. While training models suits Nvidia’s graphics-processing units perfectly, inference doesn’t require the same specialized hardware.

Competitors like Google and AMD offer chips that handle inference equally well. Numerous start-ups are also developing inference-focused processors.

Nvidia’s Competitive Response

Nvidia is deploying capital to maintain its market position. The company recently struck a deal worth $20 billion with Groq.

Groq is a private chip start-up focused on inference hardware. Nvidia’s payment covers Groq’s technology plus compensation for employees joining Nvidia.

The Groq acquisition and Baseten investment show Nvidia’s strategy. The company is building relationships across the inference ecosystem.

Baseten already integrates with Nvidia technology. The platform supports Nvidia’s Nemotron 3 Nano model, a compact and efficient AI system.

Market Reaction

Nvidia shares gained 0.7% in after-hours trading following the announcement. The stock had dropped 4.4% during regular trading hours.

The decline came during a broader technology sector selloff. Investor sentiment has cooled on some high-flying tech stocks.

Wall Street maintains strong confidence in Nvidia’s prospects. Analysts have issued 39 Buy ratings, one Hold, and one Sell recommendation.

The consensus price target sits at $263.44. That represents roughly 47% upside from current price levels.

Baseten’s partnership with major tech players strengthens its position. The company works with both Nvidia and Google through their respective relationships.

The start-up’s valuation jumped from its September 2025 funding round. Investor appetite for AI infrastructure companies remains strong despite broader market volatility.

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