By Adam Clark
Nvidia has backed a funding round in artificial-intelligence start-up Baseten. It's a signal of the increasing importance of companies specializing in inference -- the process of generating answers or results from AI models.
The chip maker invested $150 million as part of a total round raising $300 million at a valuation of $5 billion, The Wall Street Journal reported Tuesday. Baseten helps companies deploy and run large AI models.
The deal comes hot on the heels of Nvidia's big licensing agreement with Groq, a privately held chip start-up focusing on hardware for AI inference. Analysts at Mizuho estimate that currently between 20% and 40% of AI workloads are dedicated to inference, and that will grow to between 60% and 80% over the next five years.
The shift toward inference has big implications for Nvidia. While training is uniquely suited to the company's graphics-processing units, inference might be equally well handled by AI processors from peers such as Google and Advanced Micro Devices, or a range of chip start-ups.
Nvidia is using part of its huge cash flows in an effort to keep ahead of the competition. It is paying $20 billion for Groq's technology, including compensation packages for many of the company's employees who joined Nvidia, The Wall Street Journal reported.
Nvidia shares rose 0.7% in after-hours trading on Tuesday, having closed down 4.4% during the day's session amid a widespread selloff in technology stocks.
Write to Adam Clark at adam.clark@barrons.com
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(END) Dow Jones Newswires
January 21, 2026 03:29 ET (08:29 GMT)
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