Nvidia Reportedly Plans To Put More Money In Perplexity Amid Circular Deal Concerns: Critic Says Chipmaker ‘Bailing Out’ AI Firms

• Once known for its AI research capabilities, Perplexity has lost ground as ChatGPT and Claude have rolled out research modes and benefited from their broader consumer bases. 
• Nvidia first invested in the AI startup in late 2023.
• Nvidia is coming off a rough week and investors would now tune in to its quarterly results due Wednesday.

Nvidia is reportedly planning a follow-on investment in Perplexity as part of a new round that would value the AI firm at $30 billion, Reuters reported on Monday, citing a report in The Information.

Nvidia has been striking investment-cum-chip purchase deals across the AI and cloud industry, drawing criticism that the arrangements are propping up its sales and valuation while creating broader market risks.

Once known for its AI research capabilities, Perplexity has lost ground as ChatGPT and Claude have rolled out research modes and benefited from their broader consumer bases. Nvidia first invested in the AI startup in late 2023. 

“This is absolutely god damn ridiculous at this point. NVIDIA is effectively bailing out anyone in the AI industry as a means of inflating their valuations and keeping them buying compute,” technology critic and newsletter author Ed Zitron said in a X post.

“Spending every dollar it takes to stop any prominent AI company from dying, because the perception alone would be lethal to the AI narrative,” he said in a follow-on post. 

Nvidia is coming off a rough week, and investors will now tune in for its quarterly results due Wednesday. NVDA shares have fallen for six consecutive sessions, losing 4.8% in the period. The past week was the worst for the stock in nearly two months. The stock rose nearly 1% in overnight trading ahead of Monday, with a host of triggers behind the move.

NVDA: Several Catalysts Ahead Of Earnings

Nvidia is reportedly raising prices of its hardware and has informed customers of hikes rolling out early next year, Bloomberg reported on the weekend. 

Companies that build the servers under contract for large data center operators such as Microsoft, Google and Oracle have recently notified their customers of the forthcoming increases, according to the report.

A separate report said Nvidia has struck a $6 billion deal to license AI models from Poolside and will extend job offers to more than 100 employees. The startup also received an additional $1 billion investment from Nvidia at a $12 billion valuation.

The move would help it build open-weight AI models to compete with China's DeepSeek and Kimi K3, as well as those from OpenAI and Anthropic.

Nvidia’s Q2 Report On Wednesday

The market is gearing up for Nvidia’s quarterly results due after the market closes on Wednesday. The AI chipmaker’s earnings have become a closely watched event, with the potential to dictate broader market direction and shape sentiment toward the AI industry as a whole. 

Wall Street is also expecting another beat-and-raise quarter, as accelerating cloud spending from Microsoft and Amazon and major AI commitments from SpaceX and OpenAI reinforce confidence in demand for Nvidia’s chips.

Second-quarter revenue is expected to rise 13% to $92.01 billion, while adjusted profit is seen rising 11% to $2.08 per share, per estimates from Koyfin. Investors will also track Nvidia’s gross margins as high-bandwidth-memory costs rise, along with updates on China sales and the Rubin Ultra roadmap.

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