TLDR
- Nvidia invested $150 million in Baseten’s $300 million funding round, valuing the AI start-up at $5 billion
- Baseten provides AI inference infrastructure that helps companies deploy and run large AI models
- AI inference workloads expected to grow from 20-40% currently to 60-80% within five years
- Nvidia paid $20 billion for Groq’s inference technology and talent to maintain competitive edge
- Wall Street analysts maintain Strong Buy rating with average price target showing 47% upside potential
Nvidia pumped $150 million into Baseten, an AI start-up focused on inference technology. The investment came as part of a $300 million funding round valuing Baseten at $5 billion.
IVP and CapitalG co-led the financing. CapitalG operates as the venture capital fund for Alphabet.
Baseten builds infrastructure for AI inference. Companies use its platform to deploy and run large language models and other AI systems.
The start-up previously secured $150 million in September 2025. The latest round more than doubled its access to capital in under five months.
Baseten CEO Tuhin Srivastava positioned the company as essential infrastructure. He said Baseten will power the next generation of AI-driven products and services.
The company recently expanded text-to-video inferencing capabilities. Services are now available across the U.S., Finland, and France.
The Inference Opportunity
AI inference represents a growing segment of the artificial intelligence market. The process involves applying trained models to generate real-world outputs.
Common inference tasks include object detection, language processing, and content generation. These applications differ from the initial training phase of AI development.
Mizuho analysts project major growth in inference workloads. Current estimates place inference at 20% to 40% of total AI computing.
That share could reach 60% to 80% within five years. The shift changes the competitive landscape for chip manufacturers.
Nvidia dominates AI training with its graphics-processing units. Inference workloads don’t necessarily favor Nvidia’s architecture the same way.
Competitors including Google and AMD produce chips capable of handling inference efficiently. A wave of start-ups is also targeting the inference market specifically.
Nvidia’s Defense Strategy
Nvidia is spending heavily to protect its market position. The company recently announced a $20 billion deal with Groq.
Groq develops specialized chips for AI inference operations. Nvidia’s payment covers technology licensing and employee compensation packages.
Many Groq employees will transition to Nvidia as part of the arrangement. The deal brings inference expertise directly into Nvidia’s organization.
Baseten already integrates with Nvidia’s ecosystem. The platform supports Nvidia’s Nemotron 3 Nano model for efficient AI processing.
The relationship between Nvidia and Baseten strengthens both companies. Nvidia gains exposure to inference deployment while Baseten accesses Nvidia’s technology stack.
Wall Street View
Nvidia shares climbed 0.7% in extended trading after the announcement. Regular session trading saw the stock fall 4.4% during a tech sector selloff.
Analyst sentiment remains overwhelmingly positive. Out of 41 analysts covering the stock, 39 rate it a Buy.
One analyst holds a Hold rating while one maintains a Sell recommendation. The consensus price target reaches $263.44 per share.
That target implies 47% upside from recent trading levels. Analysts see Nvidia maintaining dominance despite increasing competition in the inference space.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
