Nvidia's $900 Million Deal with Enfabrica: A Strategic Move in AI Infrastructure

Nvidia spent over $900 million to hire Enfabrica CEO, license technology, CNBC reports

Sept 18 (Reuters) - Nvidia (NVDA.O), opens new tab has spent over $900 million to hire Enfabrica CEO Rochan Sankar and other staff at the artificial intelligence hardware startup and to license the company's technology, CNBC reported on Thursday. The AI chip giant is paying in cash and stock, CNBC said, citing two people familiar with the arrangement. The deal closed last week and Sankar has already joined Nvidia. Enfabrica, a Silicon Valley-based chip startup, is tackling one of the biggest technical problems that has emerged in the AI field: how to tie tens of thousands or more chips together with a network to effectively work as a single computer. If that network is too slow, expensive chips from companies such as Nvidia end up sitting idle and waiting for data. The startup's technologies can string together about 100,000 AI computing chips before the network starts to bog down. Nvidia declined to comment, while Enfabrica did not immediately respond when contacted by Reuters. Founded by veterans from Broadcom (AVGO.O), opens new tab and Alphabet, Enfabrica has raised $260 million in venture capital. It released a chip-and-software system in July aimed at reining in the cost of memory chips in those centers. The deal is reminiscent of the recent agreements by Meta (META.O), opens new tab and Google, according to the CNBC report. In June, Meta took a 49% stake in Scale AI and brought in its 28-year-old CEO, Alexandr Wang, to play a prominent role in the tech giant's artificial intelligence strategy. Alphabet's (GOOGL.O), opens new tab Google hired several key staff members from AI code generation company Windsurf, following an attempt by its rival OpenAI to acquire the startup. Reporting by Juby Babu in Mexico City; Editing by Krishna Chandra Eluri Our Standards: The Thomson Reuters Trust Principles., opens new tab

Nvidia just spent over $900 million to hire Enfabrica CEO, license AI startup's technology

Co-founder and chief executive officer of Nvidia Corp., Jensen Huang attends the 9th edition of the VivaTech trade show in Paris on June 11, 2025. Nvidia has just shelled out over $900 million to hire Enfabrica CEO Rochan Sankar and other employees at the artificial intelligence hardware startup, and to license the company's technology, CNBC has learned. In a deal reminiscent of recent AI talent acquisitions made by Meta and Google, Nvidia is paying cash and stock in the transaction, according to two people familiar with the arrangement. The deal closed last week, and Enfabrica CEO Rochan Sankar has joined Nvidia, said the people, who asked not to be named because the matter is private. Nvidia has served as the backbone of the AI boom that began with the launch of OpenAI's ChatGPT in late 2022. The company's graphics processing units (GPUs), which are generally purchased in large clusters, power the training of large language models and allow for big cloud providers to offer AI services to clients. Enfabrica, founded in 2019, says its technology can connect more than 100,000 GPUs together. It's a solution that could help Nvidia offer integrated systems around its chips so clusters can effectively serve as a single computer. A spokesperson for Nvidia declined to comment, and Enfabrica didn't provide a comment for this story. While Nvidia's earlier AI chips like the A100 were single processors slotted into servers, its most recent products come in tall racks with 72 GPUs installed working together. That's the kind of system inside the $4 billion data center in Wisconsin that Microsoft announced on Thursday. Nvidia previously invested in Enfabrica as part of a $125 million Series B round in 2023 that was led by Atreides Management. The company didn't disclose its valuation at the time, but said that it was a fivefold increase from its Series A funding. Late last year, Enfabrica raised another $115 million from investors including Nvidia rival Advanced MIcro Devices as well as Spark Capital, Samsung and Cisco. According to PitchBook, the post-money valuation was about $600 million. Tech giants Meta, Google, Microsoft and Amazon have all poured money into hiring top AI talent through deals that resemble acquihires. The transactions allow the companies to bring in top engineers and researchers without worrying about the regulatory hassles that come with acquisitions. The biggest such deal came in June, when Meta spent $14.3 billion on Scale AI founder Alexandr Wang and others and took a 49% stake in the AI startup. A month later, Google announced an agreement to bring in Varun Mohan, co-founder and CEO of artificial intelligence coding startup Windsurf, and other research and development employees in a $2.4 billion deal that also included licensing fees. Last year, Google made a similar deal to bring in the founders of Character.AI. Microsoft did the same thing for Inflection, as did Amazon for Adept. While Nvidia has been a big investor in AI technologies and infrastructure, it hasn't been a significant acquirer. The company's only billion-dollar-plus deal was for Israeli chip designer Mellanox, a $6.9 billion purchase announced in 2019. Much of Nvidia's current Blackwell product lineup is enabled by networking technology that it acquired through that acquisition. Nvidia tried to buy chip design company Arm, but that deal collapsed in 2022 due to regulatory pressure. In the past year, Nvidia closed a $700 million purchase of Run:ai, an Israeli company whose technology helps software makers optimize their infrastructure for AI. On Thursday, Nvidia announced one of its most sizable investments to date. The chipmaker said it's taken a $5 billion stake in Intel, and announced that the two companies will collaborate on AI processors. Nvidia also said this week that it invested close to $700 million in U.K. data center startup Nscale.

Nvidia spends over $900 million to hire Enfabrica CEO and license AI hardware technology

The deal brings Enfabrica CEO Rochan Sankar and key employees to Nvidia, along with proprietary technology for linking over 100,000 GPUs into unified clusters. Nvidia has spent more than $900 million in cash and stock to hire Enfabrica CEO Rochan Sankar and other key employees from the AI hardware startup, while also licensing the company's technology. The deal, which closed last week, allows Nvidia to integrate Enfabrica's expertise in connecting massive clusters of GPUs, a critical component in the ongoing expansion of AI infrastructure. The transaction is structured as an "acquihire," a strategy used by tech giants to acquire talent and intellectual property without a full merger, thereby avoiding extensive regulatory reviews. Enfabrica, founded in 2019, specializes in semiconductor interconnect technology that can link over 100,000 GPUs into a single, cohesive network. This is crucial for the large-scale data centers that power AI services, as it reduces latency and optimizes performance for training and deploying large language models. Nvidia's latest AI systems, such as those used in the new $4 billion Microsoft data center in Wisconsin, rely on rack-scale designs that integrate up to 72 GPUs per rack. Enfabrica's technology is designed to make these large clusters function as a unified computing system, complementing Nvidia's own hardware offerings. Nvidia has been involved with Enfabrica since 2023, when it participated in the startup's $125 million Series B funding round. Later that year, Enfabrica raised an additional $115 million from a group of investors that included Nvidia's direct competitor, AMD, as well as Samsung and Cisco. This brought Enfabrica's valuation to approximately $600 million, according to PitchBook data. The move is part of a larger trend of acquihires in the AI industry, as major tech companies compete for top talent. For example: While Nvidia has made fewer outright acquisitions than its peers, it has made several strategic moves to strengthen its position in the AI market. Its largest deal was the $6.9 billion acquisition of chip designer Mellanox in 2019, whose technology is now a key part of Nvidia's Blackwell AI platform. More recently, Nvidia acquired the AI workload orchestration firm Run:ai for $700 million. The company also disclosed a $5 billion equity investment in its rival Intel on Thursday and committed nearly $700 million to Nscale, a UK-based AI data center startup, earlier this week. Following the new deal, Enfabrica's CEO, Rochan Sankar, will report directly to Nvidia's leadership in Santa Clara. A Nvidia spokesperson declined to comment on the arrangement, and Enfabrica did not respond to requests for information.

This AI Startup Just Received $900 Million From Nvidia to Hire Its CEO and License Its Technology

Nvidia first invested in Enfabrica in 2023 as part of a $125 million fundraising round. Nvidia has paid nearly a billion dollars to bring in fresh talent and technology from an AI hardware startup. According to a CNBC report on Thursday, Nvidia spent more than $900 million in cash and stock to hire Rochan Sankar, the CEO of AI chip startup Enfabrica, as well as several other employees at the company. Additionally, as part of the deal, Nvidia is allowed to license Enfabrica technology. The deal closed last week, and Sankar has already begun working at Nvidia, per CNBC's sources. Enfabrica's chips use special software to keep data center speeds up, but costs down. The startup's standout feature is a system that incorporates cheaper memory costs, which noticeably reduces the cost of operating AI. Related: Nvidia's CEO Says It No Longer Matters If You Never Learned to Code: 'There's a New Programming Language' The deal, which involves bringing in new talent, is similar to those conducted recently by Google and Meta. In June, Meta invested $14.3 billion in AI data training startup Scale AI. The deal involved former Scale AI CEO Alexandr Wang leaving the startup to join Meta's superintelligence team. Meanwhile, in July, Google signed a $2.4 billion agreement with AI coding startup Windsurf to hire the startup's CEO, Varun Mohan, as well as other employees. Google also obtained a nonexclusive license to Windsurf's technology. The advantage of trading money for new talent is that tech giants can circumvent the complex regulatory hurdles that come with acquisitions -- and still poach top talent from other companies. Nvidia first began its involvement with Enfabrica in 2023, as one of the backers in a $125 million Series B funding round for the startup. Enfabrica was last valued at around $600 million in November, following a $115 million Series C round, according to PitchBook. Nvidia has also made or considered a few other high-profile deals lately. Earlier this week, the AI chipmaker announced that it would be investing $5 billion into Intel to develop advanced technology, a deal that Nvidia CEO Jensen Huang called "an incredible investment." On Friday, Nvidia signed a letter of intent to evaluate a $500 million investment in self-driving car startup Wayve. Nvidia is the world's most valuable company, a spot it claimed in June. One month later, Nvidia became the world's first company to exceed $4 trillion in market value. The AI chipmaker is worth $4.32 trillion at the time of writing.

Nvidia Reportedly Spends Over $900 Million To Hire Enfabrica CEO Rochan Sankar And License Startup's Breakthrough Technology - Alphabet (NASDAQ:GOOG), Amazon.com (NASDAQ:AMZN)

Nvidia Corp. NVDA has reportedly struck a deal worth more than $900 million to bring on Enfabrica CEO Rochan Sankar and key employees while licensing the startup's technology designed to link over 100,000 GPUs into unified systems. Nvidia Expands With Enfabrica Deal On Thursday, CNBC reported that the transaction, finalized last week, combines cash and stock. Sankar has already joined Nvidia as part of the agreement, according to people familiar with the matter. The move marks one of Nvidia's largest acquihire-style deals, giving it both top talent and cutting-edge networking technology. Enfabrica, founded in 2019, developed solutions that allow massive GPU clusters to operate as a single computer. Such capabilities are crucial for Nvidia as it scales its data center offerings to meet soaring demand for artificial intelligence infrastructure. See Also : Intel Growth Challenges Are Not Over Despite Altera Stake Sale: Analyst Building Supercomputer-Scale Systems Earlier Nvidia chips, like the A100, were deployed individually. By contrast, Nvidia's most advanced products are now shipped in racks of 72 GPUs that can be clustered in billion-dollar data centers, such as Microsoft Corporation's MSFT $4 billion facility in Wisconsin. By licensing Enfabrica's networking technology, Nvidia can expand beyond racks into supercomputer-scale systems with hundreds of thousands of GPUs tied together. Nvidia's Step Follows Wave Of AI Talent Deals Nvidia's move mirrors acquisitions by rivals seeking to capture elite AI talent without navigating lengthy regulatory reviews. Meta Platforms, Inc. META spent $14.3 billion in June to hire Scale AI founder Alexandr Wang and his team, while Alphabet Inc.'s GOOG GOOGL Google announced a $2.4 billion deal a month later for Windsurf co-founder Varun Mohan and employees. Microsoft and Amazon.com, Inc. AMZN have also completed similar transactions. While Nvidia has invested in AI startups and closed select acquisitions such as Mellanox in 2019 and Run:ai in 2024, it has been less active in major buyouts. In June, Nvidia reportedly acquired Canadian AI startup CentML, appointing its CEO, Gennady Pekhimenko, as a senior director for AI software. In August, Nvidia joined a new $863 million funding round for Commonwealth Fusion Systems, adding to the company's previous backers like Google and Bill Gates. On Thursday, Nvidia also disclosed a $5 billion stake in Intel Corporation NVDA alongside plans to jointly develop AI processors. The chipmaker also confirmed a nearly $700 million investment this week in U.K.-based data center startup Nscale. Price Action: Nvidia shares climbed 3.49% during Thursday's session and added modest gains after hours, according to Benzinga Pro. Benzinga's Edge Stock Rankings show that NVDA continues to trend upward in medium and long-term periods, but downward in short-term, with more detailed performance insights available here. Read Next: Cathie Wood Dumps Palantir As Stock Touches Peak Prices, Bails On Soaring Flying-Taxi Maker Archer Aviation Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo: Shutterstock/Hepha1st0s AMZNAmazon.com Inc$231.62-%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum72.31Growth92.43Quality67.07Value45.87Price TrendShortMediumLongOverviewGOOGAlphabet Inc$253.041.28%GOOGLAlphabet Inc$252.871.34%METAMeta Platforms Inc$781.500.75%MSFTMicrosoft Corp$509.05-0.19%NVDANVIDIA Corp$176.393.58%Market News and Data brought to you by Benzinga APIs