AI Industry Boom: Nvidia Invests $75M; Market Faces “AI Bubble” Concerns
- Editor
- February 23, 2026
- Artifical Intelligance, Business, Companies & Industry, Global Business, Tech & Innovation
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NEW DELHI – The artificial intelligence sector is entering a high-stakes chapter in early 2026, marked by a paradox of aggressive capital deployment and growing warnings of a structural market correction. While Nvidia deepens its roots in the startup ecosystem with a specialized new fund, the broader market is grappling with a staggering $13.6 billion in debt raised by AI firms in just the first two months of the year.
Nvidia’s “Day Zero” Strategy
At the India AI Impact Summit 2026, Nvidia announced a strategic partnership with Activate, a venture firm founded by former Haptik CEO Aakrit Vaish. The collaboration centers on a $75 million debut fund dedicated to 25–30 “pre-incorporated” startups.+1
In a move to secure long-term loyalty to its hardware, Nvidia is targeting founders at the “idea stage”—often before they have even filed for incorporation.
- The Incentive: Portfolio companies gain “Inception-level” access to Nvidia’s technical architecture, including the Nemotron family of open-source models, NIM microservices, and direct mentorship from Nvidia’s solution architects.
- The Logic: By embedding its tech stack into a startup’s foundational code, Nvidia creates high switching costs, ensuring these companies remain customers as they scale their compute needs.
The $1.3 Trillion “Bubble” Warning
Despite the localized optimism, the macro environment is showing signs of “speculative exuberance.” Since the start of January 2026, the combined market value of the “Big Five”—Apple, Alphabet, Nvidia, Amazon, and Microsoft—has plummeted by over $1.3 trillion as investors demand proof of profitability over “AI hype.”+1
Key Indicators of a “Bubble”:
- Debt Surge: AI startups and data center operators have already raised $13.6 billion in debt in 2026. Morgan Stanley analysts warn that total AI-related debt could exceed $1 trillion by 2028.
- Convertible Bond Explosion: The use of convertible bonds is up 556% year-over-year, a sign that companies are leveraging future equity to pay for current massive hardware outlays.
- The Revenue Gap: While U.S. capital expenditure on AI infrastructure is projected to hit $500 billion annually in 2026, actual consumer AI revenue remains a fraction of that, at roughly $12 billion.
“We are seeing a quiet migration of risk,” noted a recent report from Man Group. “The financial structure is expanding more quickly than any credible adoption curve can justify.”
A Shifting Landscape
The industry is currently divided. Proponents, including the World Economic Forum, argue that AI can already perform tasks worth $4.5 trillion and that the “value gap” is merely a timing issue. However, critics point to “circular financing”—where AI giants invest in startups that then use that same money to buy the giant’s chips—as a tactic that artificially inflates valuations.+1
As Nvidia continues to fuel the “Inception” stage of the next generation of builders, the rest of the market is holding its breath to see if these startups can turn high-octane compute into sustainable cash flow before the credit markets tighten.
