Business Of Fashion : Frédéric Arnault’s TAG Heuer ‘Transformation’

Frédéric Arnault’s TAG Heuer ‘Transformation’
The LVMH watchmaker has “reached milestones in brand transformation,” said chief executive Frédéric Arnault in an exclusive interview with BoF, though estimated revenues remain 20 percent below pre-pandemic levels.

Three years after being appointed chief executive of the Swiss watch company TAG Heuer, Frédéric Arnault said the brand had now “reached milestones in brand transformation.”

According to the 28-year-old son of Bernard Arnault, chairman and chief executive of TAG Heuer’s parent company LVMH, the main purpose of the transformation project was “brand elevation” across products, marketing and distribution.

In an exclusive interview with BoF, Arnault said TAG Heuer has two years’ worth of orders for the most expensive watch it has ever produced, the half-million-dollar Carrera Plasma introduced earlier this year; that the company’s next move would be a foray into “high horology” with more complicated chronographs priced between $50,000 and $100,000; and that the brand’s average price point has now risen above 3,000 Swiss francs ($3,320).

“We did a lot of improvements on the products, on quality, on design and on the iconicity of those products,” said Arnault, speaking at the Monaco Grand Prix last weekend (TAG Heuer sponsors the Oracle Red Bull Racing team). Last autumn, TAG Heuer’s square-cased Monaco won the Icon Prize at the Grand Prix d’Horlogerie de Genève.

Arnault said TAG Heuer’s increased average price point was a result of a strategy begun by his predecessor, Stéphane Bianchi, now president of LVMH’s watches and jewellery division.

In 2018, when Bianchi began at TAG Heuer, the brand’s average price point was significantly lower at 2,200 Swiss francs, said Arnault. He declined to divulge how many watches TAG Heuer produced annually, or the company’s turnover, but said that it was “higher” than the 729 million Swiss franc estimate published in Morgan Stanley’s annual Swiss watch industry report in March.

A move upmarket would put TAG Heuer in line with one of the clearest recent shifts in the Swiss watch industry: lower volumes, higher values. In 2018, annual exports by volume of Swiss watches totalled 23.7 million units, according to the Federation of the Swiss Watch Industry (FHS). Last year, that figure had fallen to 15.8 million. But at the same time, revenues have climbed, reaching a record 24.8 billion Swiss francs in 2022. The spike has been driven by watches with an average export value (roughly half retail) above 3,000 Swiss francs, the highest value category in the FHS’s breakdown.

Despite increasing prices, Arnault insisted TAG Heuer was still a “first luxury watch” brand and that the company’s entry-price watches, typically Formula 1 battery-powered models costing from around $1,500, remained its core business. “There’s this belief that between 1k and 3k [dollars], volumes are going down,” he said. “But it’s not what we’re seeing.”

Even so, he said he had witnessed a change in his customer base. “Ten years ago, the core focus was the customer who had one watch in his lifetime, maybe two,” he said. “And yes, it’s true there’s less of this customer, but the collector customer base profile is growing tremendously, and it’s grown a lot in the past 10 years. There are a lot more people collecting watches and now this is taking a much bigger share in our customers.”

He also said he believed his consumers were no longer driven by price. “The price is not the topic,” he said, adding that he felt multi-brand retailers were too focused on selling watches according to budget. “It’s about the story, the design and the brand values.”

To that end, Arnault has worked to rewire TAG Heuer’s marketing strategy. Under Jean-Claude Biver, Bianchi’s predecessor as TAG Heuer chief executive, TAG Heuer had entered elite football, becoming the official timekeeper of a number of the world’s professional leagues, including the Premier League. But Arnault exited the brand from the sport. “It took three years to stop all these deals and they’ve now all gone,” he said.

“When I joined, we decided to refocus on sports associated with speed and motorsports, which was a bet at the time, even if it’s not that long ago. We were hearing motorsports were an old man’s sport that talked mainly to Europeans and not to women or the younger generation. We were also hearing there were issues of sustainability.”

TAG Heuer’s continued investment in Formula 1 and motorsport had paid off, though, he said. “We believed it was so important to the brand, and we had to invest heavily. It proved to be right.” Arnault cited the impact of Formula 1′s owner, the Nasdaq-listed American company Liberty Media, on the sport and what he called its “disruptive communications strategy,” powered by the hit Netflix series Drive to Survive.

Arnault said he had no plans to follow Rolex’s lead and enter the fast-growing certified pre-owned category, but that TAG Heuer would continue to invest heavily in what he called “content and storytelling.” In April, the brand released the five-minute film The Chase for Carrera directed by David Leitch, starring Ryan Gosling and Saturday Night Live’s Vanessa Bayer, and featuring TAG Heuer’s automotive partner Porsche, another deal done since Arnault’s arrival.

While LVMH singled out TAG Heuer with Tiffany and Bulgari for its “sustained creative momentum” in its 2022 annual report, the watchmaker’s revenues appeared to remain below pre-pandemic levels. Others meanwhile have made rapid gains. According to Morgan Stanley estimates, rival Breitling has increased its turnover from 440 million Swiss francs in 2019 to 860 million Swiss francs in 2022. The same reports suggest TAG Heuer sales are still about 20 percent down on 2019 levels, when its revenues were estimated at 857 million Swiss francs.

But Arnault’s impact at the company has already made his next steps the subject of industry speculation. Earlier this year he attended a Louis Vuitton event in Zermatt and a Bulgari event in Venice. “I believe the strategy we’ve put in place [at TAG Heuer] will continue, even the day I move to another project,” said Arnault. “But this is not soon. I’m not going to Bulgari.”

WSJ : A Visual Breakdown of America’s Stagnating Number of Births

A Visual Breakdown of America’s Stagnating Number of Births
Births stayed flat in 2022, with numbers down among younger women

About 3.66 million babies were born in the U.S. in 2022, essentially unchanged from 2021 and 15% below the peak hit in 2007, according to new federal figures released Thursday.

The provisional total—3,661,220 births—is about 3,000 below 2021’s final count, according to the Centers for Disease Control and Prevention’s National Center for Health Statistics. Final government data expected later this year could turn that small deficit positive.

Experts have pointed to a confluence of factors behind the nation’s recent relative dearth of births, including economic and social obstacles ranging from child care to housing affordability.

Absent increases in immigration, fewer births combined with ongoing baby boomer retirements will likely weigh on the labor force supply within the next 10 years, said Kathy Bostjancic, chief economist at Nationwide, an insurance and financial-services company.

“You’re going to have a real shortage of workers unless we have technology somehow to fill the gap,” Bostjancic said.

A look at the trends in charts:

Births stay well off peak
The government tallied about 655,000 fewer births in 2022 than the 2007 high of 4.32 million, reflecting ongoing decreases. With still-elevated deaths due in part to the latter phase of the Covid-19 pandemic, the U.S. in 2022 saw only about 385,000 more births than deaths.
The 2022 total might tick higher when final data is tallied later this year. Final 2021 births were about 5,000 above the provisional number; for 2020, the final tally was about 8,400 greater.

Fertility remains below ‘replacement’ level
The total fertility rate—closely watched because a level of 2.1 children per woman is the “replacement rate” needed for a population to maintain current levels—was 1.665 in 2022. That was essentially unchanged from 1.664 in 2021 and only a slight recovery from a record low in 2020.
The U.S. has generally been below replacement level since the early 1970s.

Hispanic fertility rates climb
The general fertility rate for Hispanic mothers increased 4% in 2022, second only to people of Native Hawaiian or other Pacific Islander origin. Fertility rates among Asian women rose 3%; rates for all other groups fell.
Hispanic mothers accounted for 25.5% of U.S. births in 2022, a record, while the shares of births from non-Hispanic white and Black women declined. White women accounted for 50.1% of births in 2022, Black women for 13.9%, and Asian women for 6%.

Birthrates continue declining among the young
The trend of decreasing birthrates among younger women continued in 2022. For teens ages 15 to 19, the birthrate fell 3%, and for ages 20 to 24 it was down 2%. The rate for the next oldest group, 25 to 29, edged up only slightly. Increases were mainly seen among women 35 to 44.
If trends continue, the birthrate for women ages 35 to 39 might soon eclipse the rate for ages 20 to 24.

FT : Investors turn to AI-guided dealmaking to gain edge over rivals

Investors turn to AI-guided dealmaking to gain edge over rivals
Accountancy firm KPMG, hedge fund Coatue and VC firm Headline among those incorporating the technology

Venture capital funds, private equity groups and accountancy firms are using the latest artificial intelligence to pick acquisition targets and start-ups for investment, betting the technology can give them an edge over rivals.

Big Four accountant KPMG, hedge fund Coatue and venture capital firm Headline are among those using the latest AI tools to advise clients and help guide their dealmaking.

With investors under pressure to identify the next high-growth start-up at a time when few companies are going public, some argue that dealmakers can benefit from using generative AI for tasks such as assessing a company’s growth potential based on financial analysis.

“If you can train or use a model that gets a lot of efficiency first, you will get an advantage in that particular area of the business that is harder for a second mover to do,” said Pär Edin, who leads innovation in KPMG’s US deal advisory and strategy business. “It is about getting there first for each and every particular use case.”

The pace of artificial intelligence development over the past six months, triggered by the release of OpenAI’s popular ChatGPT — a chatbot that provides humanlike answers to queries — has spurred investors to use the tools to identify fast-growing companies and acquisition targets.

KPMG has used the technology behind ChatGPT to create a system based on its own data to help advise its staff. The company said the tool had seen high take-up over the course of the month it was in use, adding that recent advances in AI had made it “practically useful . . . particularly in M&A”.

Coatue’s software Coatue Brain integrates generative AI into its data platforms, using the technology to sift through sellside research, earnings transcripts and pitch decks to extract and condense key points into clear and concise briefings.

PitchBook’s AI-driven “VC exit predictor” evaluates how likely a company is to go public or be acquired. The data provider has claimed that the two-month-old tool had a 75 per cent accuracy rate.

Meanwhile, venture capital firms Headline and Moonfire Ventures have used generative AI to assess and compare investment targets based on measures such as web traffic and new users, so as to isolate those with the biggest growth potential.

Partners could then focus on thousands, rather than millions, of companies, said Headline. The VC firm added that it had invested in some businesses, such as password management service Bitwarden, largely on the recommendation of its AI.

The increased use of AI in investment has raised questions over the traditional roles of human relationships and judgment in the sector. Industry analyst group Gartner has estimated that AI and data analytics will inform more than three-quarters of venture capital and early-stage investments by 2025.

“We don’t think it puts the traditional role of a VC under threat,” said Mathias Schilling, a founding partner at Headline. “The whole concept is a co-pilot; it makes us much smarter when we engage with a company.”

London-based Moonfire said it used AI to review about 50,000 companies every week, evaluating, for example, a founder’s experience and the potential for returns on investment. The company drew on its algorithm to discover and back UK fintech LiveFlow, leading a $3.5mn seed raise.

“We’re seeing significant improvement in our algorithms because of what’s happened in the last four months,” said Mattias Ljungman, Moonfire’s founder, who also co-founded European venture capital firm Atomico.

Moonfire is seeking to mitigate potential algorithmic bias by setting out rules so that AI cannot take certain attributes, such as gender, into account when evaluating founders of companies.

But Anne Glover, chief executive at venture capital firm Amadeus Capital Partners, said generative AI had nevertheless tended towards bias, adding that the tools used limited and historic data.

“It is impossible to assume that you should be making that kind of human decision based on what an AI is doing,” Glover said. “For someone like ourselves, where we are investing at the cutting edge, there isn’t a lot written about what we are looking for.”

FT : ‘Everyone will get affected’: Tesla jolts EV charging industry

‘Everyone will get affected’: Tesla jolts EV charging industry
Opening up proprietary Supercharger network qualifies car group for new US subsidies

Tesla’s proprietary charging network helped power its rise as the dominant US electric-car maker. Now it is opening that network to rival marques — a decision that will shake up a nascent roadside charging industry.

The Supercharger network’s thousands of locations were designed to repower only Tesla vehicles — a “walled garden”, in Elon Musk’s words. But last week the chief executive said he will allow Ford cars to plug in at 12,000 sites starting next spring. Tesla earlier announced plans to invite other EV brands to use at least 7,500 charging locations by the end of 2024.

Opening Tesla’s garden will alter the ecosystem that has sprung up outside its gates. Specialist charging companies such as Chargepoint Holdings, EVgo Services and Electrify America have been competing to serve cars made by a variety of manufacturers.

“Everyone will get affected in some shape or form if Tesla’s charging network continues to grow and reach more types of vehicles,” said Nick Nigro, founder of the consultancy Atlas Public Policy, a research group. “[Tesla is] seeing the opportunity of where the market is going, and they know they have a good charging service . . . They think they’re ready to do that for all vehicles now.”

The US has roughly 139,000 ports, or individual charging places, with just under 32,000 of them offering “fast” charging that can replenish a battery in about 30 minutes, according to Atlas. Tesla operates more than 19,000 fast chargers. In an effort to hasten adoption of electric vehicles, President Joe Biden has said the US needs to establish 500,000 public chargers across the country by 2030.


Jonathan Levy, chief commercial officer at EVgo, sounded sanguine about Tesla’s move as the overall market expands. “Getting to EV ubiquity means having more fast charging, and so Tesla will have more, we will have more, our competitors will have more, and we’ll continue to grow the pie,” he said.

Brendan Jones, chief executive of Blink Charging, said Tesla’s move did not signal that fast charging was becoming a commodity service such as filling up at a petrol station. Slower public chargers, known as “Level 2”, have been growing more commodity-like over the past three years, he said.

Most vehicle charging is done overnight at home, where EV owners can benefit from cheaper electricity prices and charging that can take up to 12 hours is no drawback. But public charging stations, particularly fast ones, are essential to allay fears of being stranded with no place to charge, a barrier to EV sales.

Some charging companies including Chargepoint, EVgo and Volta Charging went public through deals with special purpose acquisition companies during the recent boom in such vehicles. Some groups sell electricity, while others sell equipment and software. Volta, which planned to generate money through advertising on charging posts, is now charging for electricity and was purchased by the oil major Shell in March.

The stock prices of many of the publicly traded charging companies have plummeted as interest rates rose and investors soured on unprofitable companies pouring capital into charging networks. Chargepoint has fallen 69 per cent since it debuted in February 2021, while EVgo has declined by 74 per cent.

“Wall Street hates the stocks,” said Craig Irwin, an analyst with Roth Capital Partners, because the rapid growth in EV adoption has meant the companies needed more capital than they expected. Yet “there’s nobody that I’m seeing that’s really stumbling right now. It’s hard to stumble when your industry is growing close to 100 per cent.”

One regular frustration of electric vehicle drivers is travelling to a public charging point only to find it unusable. In response, Ford in 2021 started a programme called “Charge Angels” where workers were sent to test charging points available to customers. Nigro at Atlas said its deal with Tesla is “arguably a shot across the bow to the existing charging providers to Ford vehicles”.

Other than Tesla, the charging experience is “lacklustre”, Nigro said. As EV adoption increases, charging companies will be tested to improve engineering and customer service, with deep-pocketed groups commanding an advantage.

“There are going to be some winners, and there are going to be some losers,” he said.

Investors have sunk $13bn into US EV charging infrastructure, according to Atlas. A bipartisan infrastructure bill that Biden signed in November 2021 allots $7.5bn to build out a network of chargers across the country.

The federal funding washing into the industry is “material”, Irwin said. But to be eligible, companies must adopt the dominant charging standard known as the combined charging system (CCS). Tesla, which has a different standard, must extend charging service to other car brands to qualify for the subsidies.

Hooking up different types of cars at Tesla Supercharger locations may present practical challenges. It is easier to provide a seamless charging experience for customers when, like Tesla, a company controls both the vehicle and the charging infrastructure. Levy of EVgo noted that one of the most common problems with public charging were communication timeouts between charger and vehicle, or between cloud and payment processing systems, “and Tesla has not had to deal with that yet”.

Even a charging site that is laid out to accommodate Tesla vehicles could have problems if the cables on the charger are not long enough to reach the connection site on the vehicle.

“Nissan Leaf’s in the front, [Hyundai Ioniq 5] is on the back right, . . . Volvo is the back left — the cable needs to be able to reach all those folks, as well as serve multiple voltages,” Levy said. “So there are a lot of questions.”

FT : Private wealth advisers call for tax loopholes to be closed

Private wealth advisers call for tax loopholes to be closed
Industry is ‘unethical and failing clients’ says group

A group of 100 private wealth advisers have urged their industry to set up a unit to inform the UK’s HM Revenue & Customs of ways in which tax law is being exploited.

The anonymous group of industry practitioners, who work across the sector from private banks to Big Four accountancy firms and elite law firms, are part of a newly formed group called the Progressive Advisors’ Movement.

The group is challenging what it describes as an “anti-tax” culture within the private wealth industry in which paying tax “is uniformly framed with a negative bias”.

In a report released on Wednesday the advisers criticised the industry as “unethical”, “politically biased” and “failing clients”.

“The sector is seen as playing a role in lobbying government in pursuit of lower taxes for wealthy clients,” the group said. “It is also seen as failing to fulfil any potential role in supporting government to identify where tax loopholes exist, or where regulations are being used beyond their intended purpose.”

Among other measures, the report recommended a new industry body to advise the UK government on where the wealthy were pushing tax law beyond its intended purpose.

“It is anti-democratic to have what is effectively a two-tier tax system, which means that if you have enough money to pay advisers you can take advantage of various loopholes and strategies that minimise tax,” said Stephanie Brobbey, a former private wealth lawyer who has spearheaded the campaign.

Brobbey worked for a decade at law firm Goodman Derrick, now RWK Goodman, before launching the Good Ancestor Movement, a consultancy helping wealthy clients achieve goals of responsible wealth stewardship and “radical redistribution”.

Her growing concern about pandemic-related inequality and the impact of increased taxes on those with lower incomes meant she felt her position as a professional services adviser within the private wealth industry “had become untenable”, she explained.

The report did not list specific tax loopholes and insisted the proposed industry body would not be a whistleblowing forum but a collaborative initiative between government and industry.

Asked about tax products that went beyond the law’s intended use, she gave the example of Aim portfolio stocks. If certain conditions are met, these allow investors to pass down assets free of inheritance tax after two years.

This was not the original purpose of this tax law, she said. “Depending on how much you are a prepared to risk, it can enable quite a lot of wealth to be passed [down without tax].”

The advisers also accused the industry of not doing enough to understand different clients’ attitudes to tax and as a result auto-enrolling them into tax minimisation strategies. They argued there was a blind spot about clients who are “are tax-proud and do not want to minimise taxes”, though the report did not estimate the proportion of clients falling into this bracket.

FT : Renewable energy drive to lift capacity by a third in 2023, IEA says

Renewable energy drive to lift capacity by a third in 2023, IEA says
China’s push into solar and wind projects to account for lion’s share of increase

Renewable energy capacity is set to grow by one-third in 2023, driven in large part by the big push into solar and wind power by China, the International Energy Agency forecast.

In the largest annual expansion to date, the IEA estimated renewable capacity to increase by 107GW to 440GW — equivalent to the total installed power capacity of Germany and Spain.

A combination of government support, energy security concerns and renewables’ increased competitiveness against fossil fuels was behind the forecast surge, the IEA said, outweighing the challenges posed by rising interest rates, higher investment costs and supply chain challenges.

While expansion is taking place across the world’s biggest markets, China was expected to further cement its position as a renewable energy leader, set to account for 55 per cent of global annual capacity additions in 2024.

China has promoted the development of large-scale solar projects to provide energy that is cheaper than benchmark coal electricity prices, as well as smaller-scale installations for public institutions and state-owned businesses.

The country is also expected to be behind a nearly 70 per cent global rebound in wind power capacity in 2023, after deploying about a third less than expected in 2022.

This followed Covid-19 restrictions that led to the delay of multiple onshore and offshore projects that are now expected to become operational in 2023 and 2024. This would lift China’s share of global wind capacity expansion to more than 60 per cent over the next two years.

In the US and Europe, supply chain issues also delayed wind projects that were planned for 2022 until 2023.

But it was solar electricity panels, or solar photovoltaics, that accounted for two-thirds of the total increase in renewable capacity forecast for 2023, both from large-scale plants and smaller systems, including rooftop set-ups.

Manufacturing capacity for solar PVs is expected to more than double to 1,000GW by 2024, led by China, the US, India and Europe. Based on current trends, the world will have enough solar manufacturing capacity to meet the IEA’s scenario for net zero greenhouse gas emissions by 2050.


However, the agency warned that further policy support for renewables was needed, as well as improvements to grid infrastructure, to meet demand.

“Policies need to adapt to changing market conditions, and we need to upgrade and expand power grids to ensure we can take full advantage of solar and wind’s huge potential,” said IEA executive director Fatih Birol.

Forecasts for renewable energy capacity in Europe have been increased by 40 per cent since Russia’s full-scale invasion of Ukraine spurred many countries to boost their solar and wind capabilities to replace Russian natural gas. High energy prices made rooftop solar plants more financially viable and boosted policy support in markets such as Germany, Italy and the Netherlands.

Newly installed solar and wind capacity is estimated by the IEA to have saved EU electricity consumers €100bn over 2021 to 2023.

Biofuels helped avoid the use of 2mn barrels of oil in 2022, the IEA said, as countries with feedstock and spare capacity, such as Argentina, India and Indonesia, boosted production to bring down fossil fuel imports.

The updated biofuel forecast was based on an 11 per cent rise in new demand by 2024, with nearly two-thirds of this demand coming from emerging markets. However, in advanced markets new policies are not expected to influence production until after 2024, with high prices, feedstock supply issues and technical constraints limiting growth.

“While the scale of new projects is impressive, it is not yet at a level that would avoid a feedstock supply crunch, and the feasibility of most new [biofuels] projects is uncertain,” said the IEA.

>>> US After Hours Summary: AI -18.1%, OKTA -15.6%, VSCO -11.9%, CRWD -11.3%, CR

After Hours Summary: AI -18.1%, OKTA -15.6%, VSCO -11.9%, CRWD -11.3%, CRM -6% lower on earnings; CHWY +13.1%, JWN +7%, VEEV +6.9%, PSTG +6.2%, NTAP +5.2% higher on earnings; LCID -7.5% falls on offering

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: CHWY +13.1%, JWN +7%, VEEV +6.9%, PSTG +6.2%, NTAP +5.2% (also authorizes addiitonal $1 bln share repurchase program), CRDO +0.6%, PHR +0.4%

Companies trading higher in after hours in reaction to news: KRP +3.7% (files for 5,926,520 common unit offering by selling shareholders), CLLS +2.1% (announces publication of artcile on UCART20x22), SWK +2% (exploring a sale of unit that makes excavator buckets, according to Bloomberg), ZIP +1.2% (to reduce headcount by 270; reaffirms guidance), CRON +1.1% (to exit existing US hemp-derived CBD-focused ops), RKLB +0.9% (to launch the LEO 3 satellite for TSAT), DHT +0.3% (acquires vessel), PFE +0.2% (FDA approves Pfizer's RSV vaccine for older adults), MSA +0.1% (names new COO)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: AI -18.1%, OKTA -15.6%, VSCO -11.9%, NCNO -11.6%, CRWD -11.3% (also granted Impact Level 5 Provisional Authorization from DoD), CRM -6%, PVH -5.3%

Companies trading lower in after hours in reaction to news: LXRX -14.5% (stock offering), LCID -7.5% (commences public offering and investment by PIF; gross proceeds of $3 bln), OB -1.5% (cuts workforce by 10%), AGI -0.3% (files for $500 mln mixed securities shelf offering), KMI -0.1% (to expand working gas storage capacity at its Markham facility)

Crunch BAse : AI Investing Boom Is Not New To Tech Giants (At Least Not Their VC

AI Investing Boom Is Not New To Tech Giants (At Least Not Their VC Arms)

Last week, tech titans including Nvidia and Microsoft made some big AI announcements.

Nvidia’s shares jumped on guidance for second-quarter revenue that would be more than 50% above estimates, while Microsoft announced several AI-related tidbits at its Microsoft Build conference. In addition, Google and Salesforce’s venture arm — Salesforce Ventures — took part in the largest round of the week, Anthropic’s $450 million Series C.

However, while AI’s dominance of the new cycle may seem recent, for tech’s biggest software developers, chipmakers and hyperscalers, artificial intelligence has had their attention — and money — for years, according to Crunchbase data.

Those tech giants have been placing a few AI bets for some time — although those bets have become significantly more expensive in recent years — while their venture arms have planted cash across dozens of startups through that time.
Let’s take a look at some of the biggest players and how much they’re pouring into AI startups.

Nvidia
No company has made bigger headlines than Nvidia recently, as it just became the first trillion-dollar chip firm.
Nvidia is leading the charge for chips with better processing to train large language models for AI — a race that will only get more heated as more AI applications are built and better infrastructure is necessary to support them.
To help stay ahead of the game, Nvidia has made a fair share of investments in the ecosystem surrounding AI. The chip giant has made 18 different investments in VC-backed startups since the start of 2021, per Crunchbase data.
The largest deals Nvidia participated in all have come this calendar year and include:
  • Adept AI’s $350 million Series B in March that gave the San Francisco-based startup a post-money valuation of at least $1 billion. Adept is developing AI models that cannot just respond to text commands — like a chatbot — but actually turn that command into actions. In theory, the company’s generative AI could help users do tasks from browsing the internet to navigating enterprise software tools.
  • Toronto-based Cohere’s $250 million round in May. The startup’s AI platform competes with OpenAI.
  • Drone startup Skydio’s $230 million Series E at a $2.2 billion valuation in February.
The chipmaker has thus far made four investments in the AI space this year with those rounds totaling $850 million. (It’s important to note that is the total raised in those rounds. Investors typically do not reveal their stake in an individual round.)
The price of doing business when it comes to AI investing has clearly increased. Last year, Nvidia made a half-dozen deals that totaled $297 million, per Crunchbase data. Those deals included investments in AI edge computing startup Utilidata and AI autonomous building platform PassiveLogic.
In 2021, the company made eight investments in VC-backed AI startups totaling $440 million. Those deals included conversational AI platform Kore.ai and AI development platform Saturn Cloud.

Microsoft and M12
No company made a bigger splash this year in AI than Microsoft with the news in January it had agreed to a “multiyear, multibillion-dollar investment” into OpenAI, the startup behind the artificial intelligence tools ChatGPT and DALL-E for a reported $10 billion.
Microsoft’s interest in AI is logical, as few companies have as many tentacles in every aspect of technology and innovation as the Redmond, Washington-based titan. From cloud to search to autonomous driving to analytics, Microsoft’s uses for AI are only limited by the imagination.
Along with OpenAl, the Windows creator also participated in the Adept AI deal and led an undisclosed round in London-based AI-enhanced software platform developer Builder.ai, which later announced a Series D of more than $250 million.
Since the beginning of 2021, Microsoft itself has made nine deals involved in the AI sector, according to Crunchbase data — three deals in each calendar year.
Those deals include participating in self-driving vehicle startup Cruise’s $2 billion round in 2021 and London-based AI driving tech Wayve’s $181 million Series B last year.
However, Microsoft’s investments pale in comparison to the number of deals its venture arm — M12 — has made in that same period.
M12, which invests from a single fund that is replenished by Microsoft — the fund’s sole limited partner — and is driven by financial returns, has made more than 30 deals in the AI space in the last 29 months, per Crunchbase data.
In fact, the venture arm has made nearly 60 deals in AI-enhanced or related startups since 2019.
Some of the biggest deals it has participated in include:
  • Montreal AI tech startup Element AI’s $146 million round in 2019.
  • Health cloud and analytics provider Innovaccer’s $150 million Series E in 2021.
  • Seattle-based AI sales platform Outreach’s $114 million Series E in 2019.
M12 also has led or co-led eight rounds since the start of 2021.
However, the firm seems to have stepped off the gas in its AI investing this year, as Crunchbase data indicates it has only participated in one round through the year’s first five months — San Francisco-based Typeface’s $65 million Series A. The startup has a generative AI application for creating enterprise content.

Google and GV
Similar to Microsoft, Google is ubiquitous when it comes to tech, with its hands in the cloud, drones, logistics, search, data and just about everything under the sun — so its interest in what AI can be applied to is limitless.
Despite Google’s recent participation in Anthropic’s huge round, the Mountain View, California-based search and cloud giant has only made eight deals in the AI space involving VC-backed startups since the start of 2021, according to Crunchbase data.
That does include some interesting deals, however, such as a $100 million Series B in AI-powered industrial decision-making startup InstaDeep and co-leading a $14 million Series D in AI agri-tech firm Cropin, both last year.
However, Google’s all-everything venture arm GV has been much busier.
In the last four-plus years, GV has made 45 investments in the space, per Crunchbase.
That includes participating in Palo Alto, California-based SambaNova Systems’ huge $676 million round in 2021 and its $250 million raise the year before. SambaNova was founded as an AI chip designer.
Between 2012 and last year, the venture arm — which invests in rounds ranging from seed to late-stage growth — took part in two dozen funding rounds for VC-backed startups using AI.
This year, GV has taken part in both Typeface’s raise, as well as AI and automation recruiting solution Moonhub’s $4.4 million seed, which it co-led.

Intel Capital
Few companies are more intertwined with the very basic infrastructure of technology than Intel, and few corporate venture arms are as active as Intel Capital. The firm is one of the oldest and most prolific venture arms.
Not surprising, that is also true when it comes to investing in AI-related startups — as it unlikely wants to be left behind in innovation that could revolutionize chips and processors.
Intel Capital has made a whopping 107 investments in such startups since 2016, per Crunchbase data.
More recently, it has made almost two dozen deals since the beginning of 2021. That includes co-leading some significant rounds, such as:
  • Toronto-based AI chip designer Untether’s $125 million Series B in 2021.
  • San Francisco-based Anyscale’s $99 million Series C last year. The startup helps scale AI applications.
This year, Intel Capital has made only one announced deal in the AI space, leading a $20 million Series A for Israel-based MDI Health, which offers an AI-powered platform that provides decision support tools for drug treatments.

Salesforce Ventures
Granted, when one thinks about AI and who would invest, one would logically think of chipmakers, cloud providers and those involved in analytics and search.
However, many AI applications are marketing and sales related, so it makes sense that one of the largest CRM and sales platforms in the world would be making investments in the space — or at least its venture arm is.
Salesforce Ventures has taken part in more than 50 deals that involved AI-related startups since the start of 2019, per Crunchbase data.
Some of the more noteworthy rounds it took part in last year include Seattle-based AI-fueled sales enablement platform Highspot’s $248 million Series F, and Redwood City, California-based machine-learning data catalog Alation’s $123 million Series E.
This year, the venture arm has made four deals, including participating in Anthropic’s recent big raise. It also led Cohere’s huge $250 million round and a seed round for New York-based Hearth AI, a relationship management system.
Salesforce Ventures’s deals also show the rising price to invest in AI-related startups. While the venture arm made 10 investments in deals that totaled $736 million, the four deals this year have totaled $705 million.