NVIDIA allocates $7 billion to AI startup Poolside amid GPU demand concerns
NVIDIA will pay $6 billion to license Poolside’s technology and invest $1 billion in the startup, creating a hedge against potential slowdown in GPU sales and bolstering its Nemotron AI models.
NVIDIA announced a $7 billion commitment to AI startup Poolside, comprising a $6 billion licensing deal and a $1 billion equity investment that values the company at $12 billion. The agreement includes hiring most of Poolside’s engineering staff to enhance NVIDIA’s Nemotron-class open-weight AI models, which the company says will help it compete with offerings from Chinese AI labs and major U.S. firms.
By integrating Poolside’s technology, NVIDIA aims to improve the performance of its Nemotron 3.5 Lightning model, which it launched in August and claims can generate tokens four times faster than comparable models, though independent analysis notes modest gains in task acceleration. The partnership also provides NVIDIA with a fallback option to allocate its GPUs to internal AI workloads if external demand weakens.
The move follows reports of upcoming price increases for NVIDIA’s Grace Blackwell GPUs and Vera Rubin systems and potential long-term supply agreements with memory makers Micron and SK Hynix. It comes as OpenAI CEO Sam Altman recently acknowledged that AI adoption may proceed more slowly than previously projected, prompting industry players to reassess demand forecasts.
"We see this partnership as a strategic step to diversify our AI ecosystem and reduce exposure to market volatility," a NVIDIA spokesperson said.
Analysts view the deal as a hedge against a possible contraction in GPU sales while positioning NVIDIA as a more direct competitor to firms such as OpenAI and Anthropic.