Nvidia Invests in Creating an Open Model to Compete with Chinese Open Source
Nvidia is investing $7 billion in creating an open model that can compete with Chinese solutions. The deal with startup Poolside will allow the company to acquire technologies for developing new AI models.
Nvidia Invests in Creating an Open Model to Compete with Chinese Open Source
Nvidia is investing around $7 billion in this idea.
The company has struck a major deal with startup Poolside, which is developing its own models (primarily for coding). Poolside's creator, Jason Warner, was previously the CTO of GitHub and released Copilot.
For $6 billion, Nvidia gains an exclusive license for Poolside's technology and takes most of its employees for its projects, while the startup formally continues to exist as an independent company. Additionally, Nvidia is investing another billion dollars as an investment (Poolside is currently valued at around $12 billion).
With the acquired technology and about a hundred Poolside employees, Nvidia plans to revive Nemotron – its line of open models. The goal is to release a model that could compete with DeepSeek and Moonshot.
When informing shareholders about the reorganization, Poolside noted that "this deal is intended to prevent AI from becoming a closed technology controlled by a narrow circle of people." It sounds altruistic, but for Huang, of course, the motivation is not only to elevate American open source to a new level.
It is important for him to remain a monopolist, and he sees open models as an infrastructural lever that strengthens the world's dependence on his GPUs. The Chinese are developing their own chips, and top AI players are doing the same. An open model optimized solely for Nvidia hardware, which thousands of companies around the world deploy on their infrastructure, is an excellent way to retain more market share.
Why it matters
AnalysisThis deal could significantly impact the AI market, as open models may become a crucial tool for technological advancement. Nvidia's investment in Poolside highlights the importance of competition with Chinese technologies.
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