❯ NVIDIA Buys Poolside’s Technology and Team for $7 Billion, Builds Its Own Open-Source Model to Rival DeepSeek

DEALNVIDIA has struck a deal worth roughly $7 billion with code-model company Poolside — $6 billion for the non-exclusive license to its Model Factory training system, plus a $1 billion investment at a $12 billion pre-money valuation. Per The Wall Street Journal, 109 Poolside engineers will fold into NVIDIA’s Nemotron open-weights model project; the founding team will not move over, and the company continues to do research independently.

SUPPLYThe same week, NVIDIA reached into the data layer. Per The Information, existing investor General Catalyst is leading a round that would push AI data supplier Mercor’s valuation to $20 billion, with NVIDIA in talks to participate — double Mercor’s $10 billion valuation from last October.

WHAT IT BUYSLast quarter, NVIDIA already paid Mercor tens of millions of dollars for expert-annotated data in law, finance, and science — the very data feeding Nemotron. If the deal closes, Mercor will surpass Scale AI to become the highest-valued company in the data-labeling space.

WHY NOWNVIDIA’s books have long made the motivation clear: in the quarter ended April, it invested $18.58 billion in private equity, versus just $649 million a year earlier. No matter how many chips it sells, as long as Chinese models like DeepSeek and Kimi hold the top spot in open weights, where inference demand flows is not NVIDIA’s call. Buying Poolside fills out the training stack; investing in Mercor locks up the data source — the two deals together form an in-house pipeline from data to weights.

STAKESOpen-source model vendors are first to recalculate their timelines. Nemotron used to be more of a giveaway to developers; now it has a dedicated 109-person team and an acquired training pipeline. Closed-source labs are feeling the squeeze too — a chip supplier that releases the strongest open weights for free will directly undercut the pricing of their mid- and low-end models. Chinese open-source players like Zhipu and Moonshot AI must reassess how much of their lead window remains.

▪ SIGNALA chipmaker building the strongest open-source model itself was never about selling the model — it’s about becoming the default option that routes everyone’s inference onto its own hardware.