By Thibault Spirlet | October 8, 2025

As artificial intelligence continues to move from cutting-edge research into the heart of the global economy, the decisions of tech titans are watched closely by investors and entrepreneurs alike. Recently, Nvidia CEO Jensen Huang publicly voiced regret over not investing more in xAI, the artificial intelligence startup led by Elon Musk, lauding Musk’s consistent record of building transformative, industry-defining companies.

Huang’s Candid Admission: A Missed Opportunity in xAI

Speaking with CNBC, Huang explained that Nvidia is already an investor in xAI, but believes he should have allocated more capital to the venture. “The only regret I have about xAI — we’re an investor already — is that I didn’t give him more money,” Huang stated. “Almost everything Elon’s part of, you really want to be part of as well.”

Musk’s xAI, founded in 2023, quickly made headlines by positioning itself as an open alternative to established AI labs like OpenAI and Anthropic. The company has rapidly expanded, reaching a reported valuation of $24 billion after a $6 billion Series B fundraising round in May 2024, making it one of the highest-valued AI startups in the industry. Investors include notable venture funds, Saudi and Emirati sovereign wealth funds, as well as individual backers like Huang himself.

Industry observers note that xAI’s growth is emblematic of a broader surge in private investment into generative AI companies, as large language models and multimodal AI systems move towards commercial deployments that promise to transform enterprise productivity, communications, content creation, and beyond.

Nvidia’s Central Role in the AI Boom

As the world’s leading provider of GPUs — the hardware backbone for modern AI — Nvidia has seen its market capitalization soar to over $2.2 trillion by mid-2025. The surge has been driven by spiraling demand for Nvidia’s H100 and A100 chips, which power the biggest AI models at companies like OpenAI, Google, Microsoft, Amazon, and xAI.

In the same interview, Huang rejected any concerns about “circular financing” — the idea that Nvidia bankrolls startups that, in turn, buy vast quantities of its chips. “I’m super excited about the financing opportunity they’re doing,” he said. “These ventures are the future of computing. The demand for real-world AI solutions is far outpacing anything we’ve seen before.”

Huang’s endorsement of xAI and Musk’s larger vision underscores the strategic alliances forming within the rapidly consolidating AI industry. Major technology firms are racing to secure access to Nvidia’s GPUs, while simultaneously investing in new AI platforms that promise to reshape entire industries.

Distinguishing AI’s Boom from the Dot-Com Bubble

Huang also urged stakeholders not to equate the current AI boom with the 1990s dot-com era. “The current wave of AI investment is dramatically different from the dot-com era, and is fueled by real, trillion-dollar demand,” he asserted. “Back then, all the internet companies combined were maybe $30 or $40 billion in size. If you look at the hyperscalers now, that’s about $2.5 trillion of business already operating today.”

Indeed, companies like Microsoft, Google, and Amazon each allocate tens of billions annually for AI infrastructure, and projections from Goldman Sachs and McKinsey & Company forecast the total annual AI-driven economic impact could reach $4.4 trillion by 2030. By comparison, the commercial returns from early Web 1.0 ventures took more than a decade to fully materialize — and many failed to produce real revenues.

Huang highlighted that generative AI models have transitioned from experimental, often loss-generating tools to engines of tangible productivity and profit. “For the last several years, they were generating tokens at a loss. But in the last several months, it’s become clear the technology is now reasoning, doing research, using tools — it’s actually useful. The tokens are profitable now.”

The AI Ecosystem Grows: xAI, OpenAI, Anthropic Lead the Pack

Nvidia’s CEO described xAI as part of a new generation of formidable AI companies, joining OpenAI and Anthropic at the pinnacle of the industry’s innovation curve. xAI’s flagship product, Grok, is an AI assistant currently being integrated across Musk’s portfolio, including X (formerly Twitter), Tesla, and SpaceX operations. The open approach to model training and Musk’s advocacy for less restrictive AI oversight have brought both supporters and critics, but few doubt xAI’s disruptive potential.

Meanwhile, OpenAI and Anthropic have raised billions and established multi-year supply and research partnerships with Microsoft, Google, and Amazon. This three-way race is now attracting increased scrutiny from regulators and policymakers, who are concerned about market concentration, safety, and the implications of AGI (artificial general intelligence).

Nvidia’s Internal Transformation: AI Coders and Productivity Gains

Within Nvidia itself, Huang revealed that AI now assists all of the company’s engineers, citing exponential gains in productivity. “My favorite enterprise AI service is Cursor. Every one of our engineers, 100%, is now assisted by AI coders, and our productivity has gone up incredibly.” The company’s embrace of AI-augmented engineering positions it to further accelerate its chip development cycles and innovation in AI computing architectures.

This internal success story is part of a broader trend, as organizations across finance, healthcare, manufacturing, and media integrate AI copilots and productivity tools. Gartner estimates that by 2026, AI coders will be contributing to more than 55% of all new software projects globally.

Looking Ahead: AI’s Expanding Frontier

As AI’s commercial applications expand, investor interest continues to grow. Microsoft’s backing of OpenAI and Amazon’s bet on Anthropic are being mirrored by a surge in sovereign wealth capital and private equity flowing to xAI and other next-generation labs. The fierce competition and innovation promise ambitious progress — but also raise profound questions about the future of work, economic power, and digital oversight.

For leaders like Jensen Huang, the lessons are clear: the AI revolution is underway, and those who hesitate risk missing out on the defining technological wave of the century. As the landscape evolves, strategic bets on the right people and platforms may prove as critical as the technologies themselves.