NVIDIA Corp. (NASDAQ:NVDA) is reportedly in advanced discussions for another M&A deal aimed at acquiring talent, as it faces pressure from Google‘s internal chip development.
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A Focus on Talent
Nvidia is negotiating a deal to buy AI21 Labs in a transaction estimated to be worth between $2 billion and $3 billion, according to Ctech.
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Insiders suggest the primary motivation for Nvidia is the startup’s 200-person workforce, who hold advanced degrees and specialized expertise in machine learning.
For several years, industry analysts considered AI21 as being “on the shelf,” with other tech giants such as Google previously showing interest.
Shifting Strategies
AI21 recently changed its business focus, discontinuing Wordtune (its consumer writing tool) to prioritize enterprise solutions.
The company’s current flagship, Maestro, aims to boost model accuracy by 50%.
Despite these technical strides, the firm’s annual revenue is roughly $50 million, small compared to the billions earned by competitors like OpenAI.
Expanding Nvidia’s Footprint
If finalized, the deal would become the fourth major buyout in Israel for the semiconductor giant.
Nvidia CEO Jensen Huang has labeled Israel as a “second home” for the company. He recently announced a plan to build a massive campus in Kiryat Tivon, which could eventually house 10,000 workers by 2031.
The potential acquisition follows Nvidia’s massive $20 billion deal with Groq announced last week, which also had a massive transfer of high-level talent at the heart of the agreement.
Jonathan Ross, Groq’s founder and the original architect of Google’s TPU program, will join Nvidia along with Groq’s president and other key team members.
Groq will continue to operate as an independent entity, and Nvidia gained access to Groq’s specialized language processing unit (LPU) technology.
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