Nvidia to become a Big Shareholder in Japan's Sakana AI Firm Startup Med up of Google Researchers

Startup to be Japan's fastest unicorn; chipmaker to also support GPU supply

· An unusual deal in which a Japan-oriented startup and a U.S. semiconductor giant are teaming up.

[ABS News Service/04.09.2024]

U.S. chipmaker Nvidia will invest several billion yen (tens of millions of dollars) in Tokyo-based Sakana AI, a startup co-founded by former Google researchers, and will become a big shareholder.

Sakana AI had been negotiating with several well-known American venture capital firms to receive investment, and now Nvidia will join them. As the race to develop generative AI heats up worldwide, this is an unusual deal in which a Japan-oriented startup and a U.S. semiconductor giant are teaming up.

On Wednesday, Sakana AI announced the funding of the business development stage, known as a Series A round. The total amount raised is around 20 billion yen ($137 million), of which Nvidia appears to be the largest contributor, accounting for several billion yen. In addition, the U.S. venture capital firms New Enterprise Associates, Khosla Ventures and Lux Capital have also decided to invest.

In January, Sakana AI also raised about 4.5 billion yen from NTT Group, Sony Group, Khosla Ventures and others. Nvidia will become a big shareholder and consider collaboration in research and development and training AI talent in Japan. It will also support the utilization of graphics processing units (GPUs), which are essential for AI development.

Nvidia founder and CEO Jensen Huang said in a statement on Wednesday, "The team at Sakana is helping spur the democratization of AI in Japan by developing cutting-edge foundation models to automate and speed scientific discovery with Nvidia's accelerated computing platform."

Sakana AI's corporate value will exceed $1 billion with this funding.

Founded in July 2023, it is the fastest company founded from scratch in Japan to reach unicorn status (a billion-dollar unlisted company).

Sakana AI's strength is its technology, which combines small-scale generative AI models to achieve high intelligence efficiently. Compared to America's OpenAI and Google, whose large-scale AI models require huge amounts of training data and advanced computers, Sakana AI features lower costs and power consumption.

Nvidia's first investment in a Japanese company was the AI startup Abeja in 2017. This March, it invested in Ubitus, a Tokyo-based game-related company, through a subsidiary fund. As the race to develop generative AI heats up, 20 of the 39 companies in which Nvidia invested worldwide in 2023 were related to generative AI.

Other major tech companies have also increased their investments in AI startups, and a battle to corral technologies and talent has begun. U.S. companies Amazon and Microsoft have also been investing in major AI startups, including OpenAI, for some time now.