AI startups are facing challenges in securing compute power, specifically graphics processing units (GPUs), for their operations. The shortage of GPUs is due to large companies and wealthy nations racing to acquire them. To address this issue, global investor Index Ventures has partnered with Oracle to provide its portfolio companies with the much-needed GPUs.

Access to compute power is one of the biggest hurdles for AI companies, especially for early-stage startups. The problem lies not only in the cost but also in the limited availability of GPU capacity. More than 95% of GPU capacity is already allocated to major players in the industry, leaving early-stage companies with significant lead times to access the GPUs they require.

Index Ventures aims to remove this barrier by partnering with Oracle to provide GPUs to its earliest-stage portfolio companies. The goal is to allow these startups to focus on their core business without worrying about compute power limitations. The partnership will provide startups with a head start, enabling them to build and grow faster.

Under the deal, Index Ventures makes a pre-commitment on behalf of its startups and covers the cloud bill, while Oracle manages the GPU cluster. Portfolio companies gain access to the GPU cluster without incurring additional costs. The arrangement is not exclusive, meaning that other venture firms can establish similar partnerships with Oracle.

The collaboration with Oracle also benefits both parties. Oracle has the opportunity to meet promising early-stage companies and establish relationships with them. Additionally, Index Ventures helps its portfolio companies navigate the process of signing their own dedicated cloud deals, fostering relationships with Oracle and other major cloud providers.

Index Ventures has a substantial number of portfolio companies in the AI/ML field, and the partnership with Oracle will ensure that these startups have the resources they need. While there has been significant investment in generative AI, experts believe that we are still in the early stages of this technology’s development.

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