Nvidia Spends $6B on Poolside's Model Factory and Doubles Down on Ecosystem Spending

Nvidia has made significant moves in its ecosystem spending spree, acquiring a non-exclusive license to Poolside's Model Factory for $6 billion and investing $1 billion at a $12 billion pre-money valuation. This acquisition is not an acquihire, with the three founders of Poolside staying on.

The trigger for this deal was a $2 billion round that didn't close in time, which would have paid for a 40,000 GB300 cluster coming online in January. As a result, Poolside lost the cluster.

This move marks Nvidia's entry into the open-weight space, with the company planning to spend its entire free cash flow on its ecosystem. The deal also highlights the challenges faced by startups in raising capital for high-growth companies, especially those requiring large clusters of computing power.