Updated at 10:20 am EST
NVIDIA (NVDA) unveiled a surprise investment in a small technology group late Wednesday that underscores its bets on the broad reach that ai-related technologies are likely to have over the next year.
Nvidia, which maintains the dominant market position in making artificial intelligence chips under the leadership of CEO Jensen Huang, also manages a small investment portfolio that requires public updates under Securities and Exchange Commission rules. quarterly payments normally reserved for hedge funds and large companies. investment vehicles.
In the group's first 13-F with the SEC last night, Nvidia noted a small $3.67 million stake in SoundHoundAI. (SOUND) a technology group based in Santa Clara, California, focused on its unique voice-activated artificial intelligence platform.
Nvidia said it owned about 1.73 million shares of SoundHoundAI, following an original investment of about $75 million during a financing round completed in 2017.
Analyst Ives on SoundHoundAI: 'positive indicator'
“We view this as a positive indicator for the company, as this investment now further solidifies the company's brand within the ai revolution,” said Dan Ives, an analyst at Wedbush, which has an Outperform rating and a $5 price target on SoundHound.
“With ai godfather Jensen (Huang) and Nvidia now backing SoundHound, we think this could be the start of a broader investment in the company in the future, which is a clear tailwind,” Ives added.
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Nvidia also highlighted its $47.3 million stake in rival chipmaker Arm Holdings, which it attempted to buy outright in 2021 for around $40 billion. The group listed on the Nasdaq in September in a $5 billion initial public offering and remains 90% owned by Japan's SoftBank.
Another involvement detailed in 13-F was a $76 million stake in Recursion Pharmaceuticals (RXRX) which uses artificial intelligence technologies in its drug discovery process.
Other Nvidia holdings include medical device group Nano-X Imaging. (NOX) and TuSimple Holdings, TSPH, a technology company focused on fully autonomous driving technologies.
SoundHoundAI said last month that Jersey Mike's, the Manasquan, New Jersey sandwich chain, will use its voice-activated artificial intelligence platform to help communicate with customers to take orders and answer menu-related queries.
It can also “provide details on opening hours, parking availability and allergen information, and answer frequently asked questions,” the company said.
Similar agreements have been closed with Chipotle Mexican Grill (CMG) and krispy kreme (WILDEBEEST) .
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The group earned revenue of $13.3 million for the three months ending in October, according to its latest financial report, a figure estimated to be around $18 million for the final three months of last year.
“With ai becoming increasingly popular, the company is seeing a lot of inbound leads as the dynamic finally begins to change in terms of ai usability,” Ives said.
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“We continue to believe that SoundHoundAI is in a strong position to capture its fair share of the wave of ai chatbot market demand in 2024 and beyond, with its technology providing more use cases in the future,” he added.
SoundHoundAI shares rose 54% in early trading on Thursday and changed hands at $3.48 per share, a level that would value the group at around $890 million.
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