Startups That Bought Too Many Nvidia Chips May Have to Rent Them Out

Throughout last year, some venture capitalists raised concerns about artificial intelligence startups that used much of the capital they raised to buy or rent specialized servers powered by Nvidia chips. While spending gobs of money on those servers was all well and good for major cloud providers like Google—which also funded many of these startups so they’d have money to rent those cloud servers—VCs worried the startups could get saddled with hardware they didn’t need. 

That day might be getting closer.

Take Stability AI, which tried to compete with Midjourney and Adobe in selling tools for making AI-generated images. So far, the startup has struggled to develop a money-making business. A little while ago, so few people were paying to use Stability’s service—presumably because it was based on free open-source image generation software, Stable Diffusion—that the company thought it might as well try to eke out some revenue by renting out the servers. As Forbes has reported, Stability discussed subleasing the AI chip servers it had leased from Amazon Web Services to other AI developers as well as to venture firm Andreessen Horowitz.