Startups Struggle to Secure Funding Amid Nvidia's AI Chip Dominance

Nvidia's dominant position in the market for artificial intelligence (AI) chips has deterred venture funding for potential rivals, leading to an 80% decrease in U.S. deals this quarter compared to a year ago. The high cost of advancing chip designs to working prototypes, combined with Nvidia's strong presence in the field, has made investors more reluctant to provide significant funding to AI chip startups. This pullback in investment threatens the prospects of these startups, as evidenced by the decline in deals and funding raised. However, startups in AI software and related technologies continue to attract significant funding. While Nvidia's dominance is formidable, competitors like AMD and Intel are developing alternative chips, and there are emerging niches in data-intensive computing that could provide opportunities for new players.