Nvidia’s commitment to buy Anthropic shares in focus after Jensen Huang steps down

The resignation of Nvidia chief executive Jensen Huang has brought fresh scrutiny to Anthropic’s record-breaking initial public offering (IPO) plans, highlighting the close ties between the two artificial intelligence giants.

Anthropic’s filings show that Nvidia has agreed to buy about US$10 billion (S$12.9 billion) worth of its shares as part of a US$26 billion private placement alongside the IPO. Anthropic regards Nvidia as a strategic partner and has committed tens of billions of dollars to securing access to its most advanced chips.

Investors are watching closely to see whether Huang’s departure from Nvidia will affect sentiment towards AI deals or complicate Anthropic’s IPO and private placement next week, which together total US$90.4 billion. The departure followed revelations that Huang had been involved in multiple extramarital affairs, including one with a woman suspected of being a Chinese spy.

Bloomberg Intelligence analyst Mandeep Singh wrote in a report on Wednesday (11 November): “The leadership change could prompt Nvidia’s board to reassess its investment commitment to Anthropic, including the size, timing or strategic rationale. Any decision to delay or scale back the investment could signal weaker support from Nvidia for Anthropic’s IPO at a valuation of about US$1.4 trillion, although commitments from Google and other strategic investors could limit the impact on fundraising.”

Anthropic mainly uses chips from Nvidia, Advanced Micro Devices (AMD), Alphabet’s Google and Amazon. Amazon and Google already back Anthropic, while AMD and Google have also agreed to participate in the private placement, buying about US$2.5 billion and US$10 billion worth of shares respectively.

An Anthropic spokesperson declined to comment. Nvidia representatives did not immediately respond to requests for comment.

“For now, it looks as though this deal should go through smoothly,” Miller Tabak & Co. chief market strategist Matt Maley said in a note to clients. He said the latest developments at Nvidia and the fall in its share price appeared to have had little impact on Anthropic.

He said: “If Anthropic shares perform well in the days or weeks after the IPO, investors may be able to look past the Nvidia scandal.”

InvestorPlace chief technical analyst Luke Lango said: “Judging by the S-1 filing, Anthropic has made sound arrangements for its supply of AI accelerators and is prepared to avoid over-reliance on Nvidia.”