On Friday, Nvidia disclosed a $21 billion stake in Elon Musk's SpaceX as at the end of the second quarter. This highlights the chipmaker's growing financial exposure in companies which are at the centre of the artificial intelligence boom.
The disclosure came in a regulatory filing on Aug. 14 and showed that Nvidia owned 122.8 million Class A shares in SpaceX.
The value of the holding was based on SpaceX's share price at the end of June. As of Aug. 14, SpaceX shares closed at $140, compared with $170.86 at the end of June. This has brought down the current value of Nvidia's holding to roughly $17.2 billion. SpaceX went public in June, and since then its stock has been volatile.
Nvidia's Second-Largest Holding
The SpaceX stake was Nvidia's second-largest reported equity holding at the end of the quarter, behind its investment in Intel. Nvidia's Intel stake was valued at about $30 billion at the end of Q2, although its value has also fallen since then and currently it is around $22 billion.
Nvidia's SpaceX shares came from its earlier investment in Elon Musk's artificial intelligence venture xAI. Nvidia invested $10 billion in xAI as part of a $20 billion funding round in January. SpaceX subsequently acquired xAI in February in a transaction valued at $1.25 trillion.
The disclosure therefore reflects the conversion of Nvidia's earlier xAI exposure into a stake in the combined SpaceX business, rather than a fresh $21 billion investment made after SpaceX's listing.
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Deepening AI Partnership With Musk
The investment also comes as Nvidia and SpaceX deepen their commercial relationship around AI infrastructure. Musk said during SpaceX's second-quarter earnings call earlier this month that the company would exclusively use Nvidia chips in its AI data centres and for training and running its AI models.
Musk also said SpaceX expects to receive a significant allocation of Nvidia's Vera Rubin GPUs next year. The comments underline the strategic link between Nvidia's investment and its position as a key supplier to Musk's expanding AI and computing operations.
Also Read: 'The Best AI Computer': SpaceX Picks Nvidia As Exclusive AI Compute Partner; AMD Shares Fall 8%
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