Nvidia in Talks to Back Perplexity at $30B Valuation

Nvidia Eyes a Bigger Stake in the AI Search Race

Nvidia is reportedly in discussions to invest in Perplexity AI, a deal that could push the AI search startup's valuation past $30 billion — roughly a 50% jump from where it stood in its last financing round 1. If completed, the investment would deepen Nvidia's already extensive web of strategic bets across the AI ecosystem, extending its influence beyond chips and into the applications layer where its hardware is put to use.

A Broader Pattern of Mega-Valuations

Perplexity's potential markup is not an isolated event but part of a sweeping wave of valuation inflation across AI-adjacent companies. Databricks, the data and AI software firm, just closed a $5 billion strategic funding round that valued it at $190 billion, with plans to pour more capital into AI agent products 4. At a smaller but still striking scale, AI code-review platform CodeRabbit raised $143 million at a $1.5 billion valuation in a round co-led by Atomico and Smash Capital 5, while AI-driven proptech startup EliseAI is reportedly negotiating a new round that would value it at $3.7 billion, with Andreessen Horowitz among the investors involved 2. Even outside pure AI plays, the fundraising frenzy is spilling into adjacent sectors: Devoted Health, a Medicare Advantage company co-founded by Ed and Todd Park, is raising at a $25 billion valuation, illustrating how growth-stage capital is chasing large addressable markets well beyond software 7.

Why Venture Capital Keeps Chasing AI

The scale of these deals reflects a broader reallocation of venture capital toward artificial intelligence. AI startups reportedly captured 41% of all VC funding in a recent year, totaling more than $52 billion — a concentration of capital that underscores how thoroughly investors have prioritized the sector over others 8. Analysts tracking these trends describe a widening two-tier startup ecosystem, where AI-focused companies with strong infrastructure partnerships command outsized valuations and access to capital, while non-AI startups increasingly struggle to compete for the same investor attention 6.

The Regional and Strategic Ripple Effects

This capital surge is also reshaping geography and infrastructure investment. Utah, for instance, is emerging as a notable AI hub, backed by a $50 million supercomputer, hundreds of millions of dollars funneled into local startups, and a maturing policy framework designed to support the sector's growth 3. Such regional bets suggest that AI's funding boom is not confined to Silicon Valley megadeals but is filtering into infrastructure and talent ecosystems nationwide.

What It Means

Taken together, the reported Nvidia-Perplexity talks fit into a larger story: venture capital and strategic corporate investors are pouring unprecedented sums into AI companies at valuations that would have seemed extraordinary just a few years ago. Whether these valuations prove sustainable will likely depend on whether the underlying products — from AI search to code review to data infrastructure — can convert investor enthusiasm into durable revenue and competitive moats.