A Meteoric Rise in AI Valuation
SSI, which launched just months ago, has quickly become one of the most valuable AI startups in the world. According to a source familiar with the matter, the company was recently valued at a staggering $32 billion in a funding round led by Greenoaks Capital. This rapid ascent can be attributed in part to Sutskever’s reputation as a visionary in AI development, having played a pivotal role in OpenAI’s early breakthroughs.
The exact terms of Alphabet’s and Nvidia’s investments remain undisclosed, and spokespeople for all three companies declined to comment. However, the move signals a broader trend: Big Tech is doubling down on strategic partnerships with AI firms that require massive computing power—and in turn, drive demand for their own hardware.
Alphabet’s Dual Play: Investor and Chip Supplier
Alphabet’s involvement is particularly noteworthy because it operates on two fronts—as both an investor and a key infrastructure provider. Earlier this week, Google Cloud announced a deal to supply SSI with Tensor Processing Units (TPUs), Alphabet’s in-house AI chips designed to outperform general-purpose GPUs in certain tasks.
This marks a shift in Google’s strategy. Historically, TPUs were reserved for internal use, but the company is now aggressively expanding sales to external AI developers. Darren Mowry, a Google executive overseeing startup partnerships, told Reuters that frontier AI labs like SSI are increasingly turning to Google’s hardware.
“With these foundational model builders, the gravity is increasing dramatically over to us,” Mowry said.
Nvidia’s Enduring Dominance—and New Competition
Despite Google’s push with TPUs, Nvidia remains the undisputed leader in AI chips, controlling over 80% of the market with its powerful GPUs. Yet, in a surprising twist, SSI is reportedly primarily using TPUs rather than Nvidia’s hardware for its AI research, according to two sources.
This could indicate a growing diversification in the AI hardware landscape. While Nvidia’s GPUs are the industry standard, tech giants like Google, Amazon, and Microsoft are all developing their own specialized chips to reduce reliance on third-party suppliers—and to lock in AI startups as long-term cloud customers.
The Cloud Wars: AI Investments as a Strategic Play
Alphabet and Nvidia’s backing of SSI fits into a larger pattern where cloud providers invest heavily in AI startups that also become major customers of their infrastructure.
- Amazon has poured billions into Anthropic (an OpenAI rival), which develops its models on Amazon’s custom Trainium and Inferentia chips.
- Microsoft has a deep partnership with OpenAI, integrating its models across Azure’s cloud services.
- Nvidia, while primarily a chipmaker, has also invested in OpenAI, xAI (Elon Musk’s AI venture), and now SSI.
For these tech giants, funding AI startups isn’t just about financial returns—it’s about securing demand for their cloud and AI hardware ecosystems.
What’s Next for SSI and the AI Arms Race?
With Sutskever at the helm and heavyweight backers like Alphabet and Nvidia, SSI is poised to be a major player in the quest for superintelligent AI. However, the company faces fierce competition from well-funded rivals like OpenAI, Anthropic, and xAI, all of which are vying for dominance in next-generation AI models.
As the battle for AI supremacy heats up, one thing is clear: The winners won’t just be the companies with the best algorithms—but those that control the hardware, cloud infrastructure, and strategic alliances powering the AI revolution.
Key Takeaways:
- Alphabet and Nvidia invest in SSI, an AI startup co-founded by OpenAI’s Ilya Sutskever, now valued at $32B.
- Google is supplying SSI with TPUs, signaling a shift toward selling its custom AI chips to external developers.
- Nvidia still dominates AI chips, but Google, Amazon, and others are pushing their own alternatives.
- Big Tech’s AI investments are strategic: They lock in startups as cloud customers while fueling the AI arms race.
The AI landscape is evolving at breakneck speed—and the stakes have never been higher.