Nvidia just sent a huge signal to investors ahead of earnings

Nvidia has spent the past two years building the hardware behind almost every major AI breakthrough. Increasingly, it has also been writing checks to the companies using that hardware, turning itself into one of the most active investors in the entire AI ecosystem.

A new report put a fresh number on just how far that strategy might extend, and it points to one of the most closely watched startups in AI search.

Nvidia in talks to invest in Perplexity AI at $30 billion valuation

Nvidia is discussing an investment in Perplexity as part of an equity round that would value the AI startup at more than $30 billion, citing people familiar with the discussions, The Information reported on Sunday, Aug. 23. Reuters carried the report, saying it could not immediately verify the details itself.

The potential funding round would mark a sharp jump for Perplexity. The startup’s valuation sat at roughly $20 billion after a funding round finalized last year, meaning a $30 billion valuation would represent an increase of more than 50% in about 12 months, according to Investing.com.

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This is not a new relationship; Nvidia has had money in Perplexity since 2023. In July, Perplexity went further and committed to running its AI agent workloads on Nvidia’s Vera CPUs.

The Information also reported something worth noting: Nvidia had at one point considered a licensing arrangement or the possibility of hiring some of Perplexity’s team, rather than taking an equity stake. That conversation shifted, as the current talks are about equity.

Perplexity’s other backers add to the profile of any new round. Amazon founder Jeff Bezos and Japan’s SoftBank Group are both existing investors in the company, placing any new Nvidia commitment alongside some of the most recognizable names in global tech investing.

Perplexity AI revenue growth and the $30 billion valuation case

The financial case for a higher valuation rests on genuine growth, not just AI hype. Perplexity’s annualized revenue has climbed to more than $750 million, up from less than $250 million at the start of the year, a threefold jump in roughly eight months, according to Reuters.

Part of that growth traces back to a specific product. Perplexity Computer, a cloud-based AI agent that professionals use to automate computer-based tasks, has been a meaningful driver of the recent revenue surge.

Separately, in January, Perplexity signed a three-year, $750 million spending commitment with Microsoft to access AI models through Azure’s Foundry program (a cost arrangement, not a revenue source), giving it access to systems from OpenAI, Anthropic, and xAI while keeping Amazon Web Services as its primary cloud provider.

Perplexity has also become a recognizable name well beyond Silicon Valley. The company ranks among the top AI chatbots by market share, competing directly against ChatGPT and Google’s Gemini in the AI search race.

CEO Aravind Srinivas has kept the company’s ambitions public and specific. According to Benzinga, he told CNBC in June that Perplexity plans to pursue an initial public offering in 2028, regardless of how planned listings from OpenAI and Anthropic play out.

The timeline would put a $30 billion valuation round roughly two years ahead of its planned public listing.

Nvidia has had money in Perplexity since 2023.

Jose/Getty Images

Nvidia circular financing concerns and the Stacy Rasgon debate

This would not be an isolated move for Nvidia (NVDA). The company has become one of the most aggressive corporate investors in AI, backing startups including OpenAI, xAI, and Safe Superintelligence.

It has also funding cloud infrastructure providers including CoreWeave and Nebius, companies whose businesses depend heavily on deploying Nvidia’s computing systems.

That pattern has a name on Wall Street, and not always a flattering one. Critics describe it as circular financing, because Nvidia can invest in AI companies or infrastructure providers that subsequently use the capital to help fund purchases of Nvidia’s chips.

Bernstein analyst Stacy Rasgon has flagged it repeatedly as a source of investor unease around Nvidia’s largest AI deals.

TheStreet co-editor-in-chief Todd Campbell has framed the strategy in less alarmist terms, as TheStreet reported. He argued that Nvidia needs to keep demand growing to justify its own scale while helping build out a genuinely competitive AI marketplace, rather than a single-vendor monopoly.

A Perplexity investment would look smaller than Nvidia’s biggest recent commitments, which have run into the tens of billions of dollars for companies like OpenAI. Even so, any confirmed deal would add another data point to a growing list that investors are already tracking closely heading into Nvidia’s next earnings report.

What NVDA investors should watch ahead of Aug. 26 earnings

Nvidia reports fiscal second-quarter results on Aug. 26.

Investors will be watching for any development confirming or denying the Perplexity talks that could surface around that date, even if the company declines to comment on specific negotiations beforehand. Analysts have remained broadly bullish heading into the report, regardless of the Perplexity news.

Bank of America’s Vivek Arya has a $350 price target on Nvidia, arguing that shares remain attractively valued relative to the company’s free cash flow generation, even after concerns surrounding its growing financing commitments tied to AI infrastructure, as TheStreet reported.

Oppenheimer has separately maintained an Outperform rating and $265 price target, citing Nvidia’s strong growth prospects and attractive valuation relative to that growth.

For investors in either company, the practical signal to watch is whether this deal closes and on what terms.

A completed investment tied to infrastructure commitments, similar to the Vera CPU agreement from July, would say more about Nvidia’s long-term strategy than a purely financial stake. It would also give Perplexity more data to point to as it builds toward its own eventual public listing.