Nvidia’s Groundbreaking $7B Deal with Poolside: A New Era in AI Acquisitions
Nvidia has recently made headlines with a significant deal involving AI coding startup Poolside. The agreement stipulates a payment of $6 billion for licensing Poolside’s AI model-development software, “Model Factory”. In addition, Nvidia will invest an extra $1 billion into Poolside, valuing the startup at a $12 billion pre-money valuation. This news was initially reported by Newcomer and later confirmed by Bloomberg and The Information. The deal also encompasses job offers for 109 Poolside employees, primarily those involved in the development of the company’s open-source Laguna coding model.
Poolside’s three co-founders, including the former GitHub CTO Jason Warner and Eiso Kant, will continue their roles within the company. The company will maintain its independent operations. An investor letter clearly states that this arrangement is “not an acquisition and not an acquihire.” The license is non-exclusive, allowing Poolside to extend the same rights to other major tech giants like Google or Amazon.
This agreement marks the latest move in Nvidia’s evolving strategy to acquire crucial AI intellectual property and talent, bypassing the regulatory scrutiny associated with traditional mergers. Nvidia has previously established similar deals with Groq (~$20 billion) and Enfabrica (~$900 million). Poolside, an expert in AI systems that automate programming tasks — especially for government and defense software — will distribute the $6 billion licensing fee among its existing backers, including Bain Capital Ventures, eBay, and Sequoia.
Source: Bloomberg – Nvidia to Pay AI Startup Poolside a $6 Billion License