Nvidia's $6 Billion Deal for Poolside's Model Factory Is a Wager on Open-Source Models Driving Chip Demand
The chipmaker's move to license coding models comes as low-cost alternatives are handling an increasing share of workloads.
Overview
Nvidia (NASDAQ: NVDA) recently struck a $6 billion licensing agreement with AI start-up Poolside, extending job offers to more than 100 of the company's employees in a move reported by Bloomberg on Aug. 20. The deal landed just days after a note circulated from Goldman Sachs' One-Delta desk argued that "useful intelligence per dollar is exploding," making it harder for makers of large language model to defend premium pricing.
For a chief supplier of the silicon powering the AI labs, Poolside brings model-making capabilities, while the frontier labs face pressure from open-source competition. Nvidia sells compute capacity, and widely available, capable models drive broader AI adoption and usage, which fuels the heart of its business.
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Originally published at www.fool.com.