Nvidia, the dominant semiconductor stock. [Reuters]
Nvidia, the dominant semiconductor stock. [Reuters]

Nvidia has entered a $6 billion partnership with AI startup Poolside to build world-class open-weight AI models capable of competing with China's most advanced AI, the Wall Street Journal reported Saturday, citing sources.

Under the deal, Nvidia will pay $6 billion to license Poolside's technology and hire roughly 100 of its engineers to work on its open-weight project, Nemotron. Separately, Nvidia invested $1 billion to acquire an equity stake in the company.

In a letter to shareholders on Thursday, Poolside's founders said they hoped the future of artificial general intelligence would be "technology built openly by many, not closed technology controlled by a few."

Open-weight models offer lower operating costs and are easier to customize than their closed-source counterparts.

Nvidia CEO Jensen Huang said last month that "American AI leadership will be determined by how widely an open ecosystem spreads." In March, Nvidia launched the Nemotron Alliance, an open-model consortium that includes Mistral and Perplexity.

The deal is also expected to pose a direct threat to leading US closed-model developers such as OpenAI and Anthropic.

Poolside was founded in 2023 by software developer Eiso Kant and former GitHub Chief Technology Officer Jason Warner, and has drawn attention for its coding-automation models aimed at government and defense clients. In their shareholder letter, the founders said the company faced a crisis late last year when it failed to raise $2 billion needed to secure a large GPU cluster within six weeks. "We didn't close in time, and ultimately lost that cluster," they wrote.

Kant, Warner and other executives will remain at Poolside rather than move to Nvidia and will continue independent research. Poolside's development team is also expected to contribute to improving the largest and highest-performing models in Nvidia's Nemotron lineup.

Bloomberg noted that the deal resembles Nvidia's earlier arrangement with chip startup Groq — in which it licensed Groq's chip design technology for $20 billion on a non-exclusive basis and absorbed most of its staff — and could renew congressional criticism that Nvidia is circumventing antitrust merger review.


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