Nvidia invests $6 billion in an open-source LLM to counter Chinese models.
Nvidia is betting on open-source artificial intelligence models, having signed a strategic agreement with the AI startup Poolside worth $6 billion. The goal is to create a powerful LLM with open weights capable of directly competing with Chinese developments such as DeepSeek and Kimi K3. This is not just a licensing deal, but a systemic move to reshape the generative AI market.
Deal Details and Strategic Context
According to the information available to me, under the agreement, Nvidia will pay Poolside $6 billion for model licenses and will also offer employment to more than 100 of the startup's employees. Additionally, the chip manufacturer will invest $1 billion in technology development. Interestingly, the deal structure mirrors the recent acquisition of chip developer Groq, where Nvidia paid $20 billion for licenses and integrated most of the team.
My analysis shows: Nvidia is deliberately moving toward the democratization of AI. By supporting open-weight models, the company reduces the market's dependence on a few closed ecosystems while simultaneously boosting demand for its own GPUs and AI systems. This is a forward-looking move that strengthens Nvidia's position as an infrastructure monopolist, not just a chip supplier.
A Challenge for OpenAI and Anthropic
The deal with Poolside is a direct blow to the leaders of the American AI market, including OpenAI and Anthropic. Open models are significantly cheaper to operate and easier to customize, making them attractive to enterprise clients. In the long term, this could undermine the business models of closed developers that rely on the exclusivity of their technologies.
Political Backdrop and Regulatory Pressure
The deal comes amid renewed discussions in Donald Trump's administration about possible restrictions on the use of Chinese open-weight models. Nvidia, Meta, and Microsoft, along with 22 other companies, sent an open letter to authorities warning that bans would not strengthen U.S. technological leadership but would merely shift the market toward closed developers. The escalation of the discussion was largely provoked by the release of Kimi K3, whose creators the White House accused of distilling Anthropic's Fable model.
My expertise: Nvidia is playing the long game, using open models as a tool to expand its hardware dominance. However, the success of this strategy depends on Poolside's ability to create a model that not only catches up with but surpasses its Chinese counterparts. Otherwise, the $6 billion risks becoming just an expensive insurance policy against regulatory risks rather than a breakthrough. The AI market is entering a phase where openness becomes a competitive weapon, and this trend can no longer be stopped.