It's not just chips. Nvidia is betting on other tech that could be impacted by AI.

• Nvidia's chips primed the company to leverage the latest AI boom.
• But the GPU-maker is targeting other areas where AI could apply.
• Nvidia has invested in dozens of startups in 2023, including a company focused on pharmaceuticals.

Nvidia, the California-based chip maker, is the latest tech company to so far have a blockbuster year as it surpassed expectations and flexed a market cap of more than $2 trillion by the end of February.

That makes Nvidia one of the three largest companies by market cap, behind Microsoft and Apple.

The company's recent boom can be explained by a fairly simple formula.

Advancements in AI have fields beyond tech — like healthcare and finance — racing to figure out how to implement the technology. To do so, you need chips known as graphics processing units or GPUs that will power the AI tech. And Nvidia has the goods.

But chips aren't the only point of focus. Nvidia is looking elsewhere to take advantage of its current leverage in the recent AI craze.

The company has been expanding its venture capital footprint and throwing money at startups applying AI to a wide range of industries

In the past year, the chip maker invested in nearly three dozen startups, an analysis from Dealogic — a data company that services financial firms — shared with Business Insider showed.

According to The Wall Street Journal, which first reported on Nvidia's investing strategy, that's more than three times the number of investments the company had in 2022.

The Nvidia 'ecosystem'

Fields of interest for Nvidia range from software to pharmaceuticals and healthcare. In May, Moon Surgical secured $55.4 million in venture backing co-led by Sofinnova Partners and Nventures, one of Nvidia's investing arms, according to Cathay Health, a healthcare-centered investment firm participating in the funding round.

Nvidia also disclosed in an SEC filing from February that it has stakes in small companies applying artificial intelligence, like Recursion Pharmaceuticals, a drug discovery company, and Soundhound AI, which develops speech recognition technology.

Spokespersons for Sofinnova Partners and Nventures did not respond to a request for comment sent during the weekend.

The investments appear to have paid off. The Journal cites Nvidia's financial statements that show its investments were worth about $1.55 billion as of January versus $300 million from the previous year. Since January 2023, Nvidia's stock soared 239%.

But as The Journal notes, these investments go beyond financial returns.

By investing in AI-focused ventures, Nvidia further feeds the need for the valuable chips it makes, nourishing what the company refers to as the "ecosystem."

An Nvidia spokesperson declined to comment but pointed to a December blog post outlining how the company supports ventures "harnessing Nvidia technologies."

"Nvidia's corporate investments arm focuses on strategic collaborations," the company said. "These partnerships stimulate joint innovation, enhance the NVIDIA platform and expand the ecosystem."

Nvidia's star CEO Jensen Huang has also made a point of emphasizing the growth potential of this ecosystem.

"The biology companies, the healthcare companies, financial services companies, AI developers, large-language model developers, autonomous vehicle companies, robotics companies … All of these startups, large companies, healthcare, financial services and auto and such are working on NVIDIA's platform, Huang in an earnings call in February. "We support them directly."