Nvidia (164news.com's guide to nvidia) (164news.com on nvidia) Acquires Poolside for $6bn, Licensing Software and Hiring Staff
Nvidia is paying Poolside $6 billion to license its Model Factory software and hire 109 staff, with an additional $1 billion investment in the remaining company valued at $12 billion pre-money. This deal follows a similar structure Nvidia has used twice before, acquiring licenses, hiring key personnel, and allowing the companies to continue operating independently.
Key Points:
- License Agreement: Nvidia is licensing Poolside's Model Factory software, which was used to build AI models. The license is non-exclusive.
- Staff Acquisition: Nvidia is offering jobs to 109 of Poolside's employees.
- Investment: Nvidia is investing $1 billion in what remains of Poolside after the $6 billion acquisition.
- No Acquisition: Poolside insists this is not an acquisition, but a partnership. The three founders are staying on.
- Previous Deals: This is the third time Nvidia has structured a deal like this, with Groq and Enfabrica being previous examples.
As previously mentioned, such deals allow large tech companies to gain access to talent and technology without the regulatory hurdles of a full acquisition.
Context:
Poolside's CEO Eiso Kant revealed in June that fewer than 70 people built their core AI model, emphasizing the significant value of their intellectual property. Nvidia had already invested up to $1 billion in Poolside last October.
The Letter:
In a letter to investors, Poolside explains why it is shifting its focus:
"For the last 3 1/2 years we’ve been directionally correct in a race where capital requirements went vertical... 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."