Why Are Nvidia and Uber Backing This Tiny $900 Million Artificial Intelligence (AI) Company?

The next time you see a food robot on wheels navigating its way across a cracked sidewalk or a challenging pedestrian-heavy crosswalk, look harder. There might be some big backers behind that little rolling automaton trying to get a lamb gyro to a hungry customer a few blocks away.

Nvidia (NASDAQ: NVDA) and Uber (NYSE: UBER) were early financial backers of Serve Robotics (NASDAQ: SERV), a pioneer in delivery robotics. But it's not the only player in this niche, and there are other companies with lofty ambitions hoping to nail the last mile in urban delivery with a fleet of high-tech bots. Serve Robotics generated a mere $1.8 million in revenue for all of last year, and it had just 57 daily active robots in service heading into 2025.

Still, don't dismiss Serve Robotics just yet. It has a fun origin story, elite backers, a recurring role in a popular Netflix comedy special last year, and impressive deals that should help it scale quickly.

Hailing a fast ride

Uber's path to a stake in Serve Robotics is easy to explain: It inherited the platform. When the ride-hailing leader acquired Postmates five years ago in a $2.65 billion all-stock transaction, it was hoping to grow its reach -- for both drivers and customers -- for its fast-growing Uber Eats business. The popularity of ordering food and groceries through third-party delivery apps spiked in the wake of the pandemic, and Postmates was another weapon in the arms race.

Buried in the Postmates portfolio was a fledgling high-tech side bet on driverless deliveries: Serve Robotics. Uber thought it would be more of a distraction, so it spun the company off in 2021. Today, Uber investors have just a 12% stake in Serve Robotics.

Nvidia's entry into Serve Robotics was more conventional. The two were collaborating to incorporate Nvidia's artificial intelligence tools into Serve's autonomous delivery machines. Nvidia invested just $12 million in Serve Robotics in 2022, but that was enough for an 8% stake two years later.

That's a small price to pay for what is now the world's most valuable company by market cap, but Nvidia is known for helping finance companies that will drum up incremental business. And in any event, the stake didn't last. Nvidia cashed out its entire position -- at a healthy return -- in the fourth quarter of last year.

Image source: Getty Images.

Waiter, there's a robot in my soup

"Why deliver 2-pound burritos in 2-ton cars?" That's a question Serve Robotics asks on its website's homepage.

"Why invest in a $900 million profitless company that couldn't break $2 million in revenue last year?" That's a question investors may be asking.

Wall Street has an answer: It thinks Serve Robotics should be worth more. Even after taking a 16% spill in Friday's market sell-off, Serve Robotics is up nearly 60% over the past year. Nvidia hasn't appreciated as much since cutting Serve Robotics late last year, but it's probably not giving that tactical decision a second thought. It locked in a big gain on a small company in a short amount of time. Nvidia will be fine.

Uber is making sure its remaining stake will continue to appreciate in value. Remember those 57 Serve Robotics rolling around busy sidewalks at the end of last year? Uber Eats alone has put another 1,000 of them on the road in 2025, including 380 just last month. It expects to have 2,000 of the delivery robots in action by the end of this year.

Even Uber rival DoorDash (NASDAQ: DASH) decided to roll with the enemy. Last week it entered into a multiyear partnership with Serve Robotics to start fulfilling deliveries. Profitability may be elusive for Serve for some time, but top-line growth should be explosive through at least the next few years.

Rick Munarriz has positions in Netflix. The Motley Fool has positions in and recommends DoorDash, Netflix, Nvidia, Serve Robotics, and Uber Technologies. The Motley Fool has a disclosure policy.