Nvidia Pays Poolside $6 Billion for AI Model Development Software in Third Structured Deal

Nvidia pays $6bn for Poolside's model factory

Nvidia is paying Poolside $6bn to license the software it used to build AI models, hiring 109 of its staff, and investing $1bn in what is left. Poolside's investor letter insists this is not an acquisition. It is the third deal Nvidia has structured this way. Nvidia has agreed to pay Poolside $6bn to license the software the startup used to build AI models, and to offer jobs to 109 of its staff. It is also investing $1bn in what remains, at a $12bn pre-money valuation. The terms come from a letter Poolside sent its investors, first reported by Newcomer. The licence is non-exclusive. The three founders are staying. The deal is "not an acquisition and it is not an acquihire", the letter says. Poolside intends to distribute the $6bn to its investors by the end of next year. The third deal of this shape Nvidia has used the same structure twice before. It buys a licence, hires the staff, takes a stake, and the company continues. The licences have been non-exclusive in each case, and none of the three companies has been bought outright. TNW reported the template in May, when Nvidia paid Groq $20bn for its inference technology and took its top engineers. Groq stayed independent and raised $650m for what was left. By this month it had closed a $350m round at $3.5bn, with Nvidia participating. Nvidia paid $20bn for the technology and staff in December. Groq as a continuing company was valued at $3.5bn this month, in a round Nvidia joined. Nvidia struck a similar arrangement with the hardware startup Enfabrica for about $900m, according to The Decoder. Such deals let big technology companies secure staff and know-how without buying a company outright, it notes. They also avoid the regulatory review a purchase can bring. Who leaves and who stays In the Groq deal, Nvidia took the company's top engineers and Groq appointed new leadership. At Poolside the three founders stay and 109 employees receive Nvidia's offers. Poolside's chief executive Eiso Kant described the size of the team on the Latent Space podcast last month. "Less than 70 people built this model," he said. "Less than 115 between engineering and researchers, like, together did this effort." Latent Space called it a reverse-execuhire. The arithmetic behind that label is stark. Poolside's chief executive Eiso Kant said on the same publication's podcast last month that fewer than 70 people built the company's model. Fewer than 115 worked across engineering and research in total. The software Nvidia is licensing is called the Model Factory. It is the system Poolside used to build its models. Poolside began as a developer of a coding AI agent and moved into data centres before releasing its own open-source model on Nvidia server chips, according to The Information. Nvidia was already an investor, having committed up to $1bn to Poolside last October. The licence announced on Friday is non-exclusive, which leaves Poolside able to license the same software elsewhere. What the letter says about the cluster The letter sets out why the company stopped building frontier models. "For the last 3 1/2 years we've been directionally correct in a race where capital requirements went vertical," it says. Then the specific: "At the end of last year, we had a 6 week window in which to raise $2 billion dollars to pay for a 40,000 GB300 cluster coming online in January. We didn't close it in time, and we lost the cluster." The letter goes on to say Poolside could have built a frontier-rivalling model with 10,000 to 20,000 of those chips. Next year's frontier, it argues, needs "far more than an order of magnitude larger cluster". The constraint "is not only capital, it is physical data center space and contracted compute". The letter also says the company had been "directionally correct" for three and a half years, and that the world "has not yet reached 0.1%" of the transition to AI. Nvidia's own open models Nvidia builds open models in the Nemotron line, and TNW reported this month that it is working towards a trillion-parameter open model. Poolside's Laguna, built by the same team, was pitched as the West's answer to DeepSeek and Qwen. Poolside trained it on Nvidia server chips. Nvidia halved a $250bn commitment to OpenAI this month. Nvidia has not said what makes the licence worth $6bn. The Information's Amir Efrati wrote that it is not clear why Nvidia is paying such a large licensing fee. Nvidia has not commented publicly on the deal, and Poolside has not published the letter. What is left of Poolside The founders say they are "not ready to share the updated vision". Poolside Infrastructure Company, spun out in January, is building a 1.2GW data centre in Texas. It appointed a chief executive two months ago and a chief financial officer this week. Both appointments predate Friday's announcement. The letter's stated thesis points somewhere else again. Human-level capability will be "fully commoditized by open source models", it argues, while superintelligence will not. It then divides valuable problems into two kinds. Some are intelligence bound, and some are experiment bound. Software and accounting fall into the first and become "a low margin commodity". Curing cancer falls into the second, because no amount of intelligence substitutes for real-world experiments. The letter says the second is where the value will be. "We could put 100,000 of the world's brightest minds together to solve cancer but without a real world experimental feedback loop, they likely never will," the letter says. "AI will become the world's most valuable scientific discovery engine," it concludes. Across the three deals, Nvidia has committed roughly $27bn. Each was structured as a licence and a hiring round rather than a purchase, and in each case the company continued to operate.

Nvidia Pays $6 Billion to License Poolside AI Model-Development Software | PYMNTS.com

The Newcomer post is based on a Poolside letter to investors, according to the report. Nvidia will also invest $1 billion in Poolside at a $12 billion pre-money valuation, and Poolside's three co-founders will remain with the company. The letter said the deal is not an acquisition or an acquihire (a deal primarily involving talent), per the report. The report said that Nvidia has become a major developer of open-source models. It also said that Poolside said in its letter to investors that on its own, Poolside would have needed more access to more Nvidia hardware than was possible if it were to continue competing in the development of open-source models. Neither Nvidia nor Poolside immediately replied to PYMNTS' request for comment. In another, separate move, Nvidia said in December 2025 that it acquired talent and tech Groq, a maker of custom-built inference chips. In that deal, Nvidia entered into a non-exclusive licensing agreement for Groq's inference technology and hired Groq's founder, president and other members of the Groq team. Groq continued to operate as an independent company. An Nvidia spokesperson told PYMNTS at the time: "We haven't acquired Groq. We've taken a non-exclusive license to Groq's IP and have hired engineering talent from Groq's team to join us in our mission to provide world-leading accelerate computing technology." CNBC reported in September 2025 that Nvidia spent over $900 million to license the technology of AI hardware startup Enfabrica and hire the company's CEO and other employees. Enfabrica's technology can connect more than 100,000 GPUs and enable them to effectively serve as a single computer, according to the report. It was reported in June that Nvidia acquired predictive AI software startup Kumo AI for $400 million. In December 2025, Nvidia acquired SchedMD and said it would continue to distribute that company's open-source Slurm software, which is a workload management system for high-performance computing and AI.