Sources: Nvidia plans to use its $6B deal with Poolside to build an open-weight AI model to compete with Chinese models like DeepSeek and Kimi

Wall Street Journal 2026-08-24 Robbie Whelan

Context & Ripple Effects

This closes an arc that started with Nvidia weighing a $500M–$1B bet on Poolside last fall and hardened into last week's non-exclusive $6B licensing deal plus a $1B check at a $12B pre-money valuation. What changed today is the stated purpose: the license isn't defensive IP hoarding — Nvidia intends to fold Poolside's technology into an open-weight model aimed squarely at DeepSeek and Kimi.

First-order effects

Poolside gets $6B in licensing revenue and a $12B valuation mark overnight, while 109 of its staffers receive Nvidia job offers — a talent-and-technology transfer disguised as a commercial deal.
DeepSeek and Kimi gain a well-funded Western open-weight rival whose distribution can be bundled with the GPUs most inference buyers already run.

Second-order effects

The move echoes Nvidia's own framing from when it called DeepSeek "an excellent AI advancement" while stressing that inference still requires significant numbers of Nvidia GPUs — open weights are a way to keep that inference demand flowing through Nvidia silicon rather than ceding it to cheaper Chinese stacks.
Because the license is non-exclusive, Poolside remains free to strike similar deals with other chipmakers, so rivals now have a template for buying model capability without acquiring a lab outright.

Third-order effects

If this fits the pattern of March's Nemotron 3 Super launch and Nvidia's disclosed $26B five-year open-model budget, Nvidia is no longer just selling the shovel layer — it is vertically integrating into the model layer itself, with open weights as both product and demand engine for its hardware.

The trend: Nvidia is responding to efficient Chinese open-weight models by buying model capability outright and giving weights away, turning openness into a moat for its GPU business.

Discussion

@jasonlk @jasonlk on x
Why did Poolside license its IP to Nvidia for $6 Billion ... and ship them most of their engineers? Per @wsj, they just couldnt raise enough to fund the infra they needed And they realized they'd run out of compute as soon as next year
@alexfinn Alex Finn on x
It's official: the United States has entered the open source AI war Nvidia signed a 6 billion dollar deal with Poolside to have them start working on their open source Nemotron model This is the best news of the year. The US can't roll over on open source Here's where it gets
@0xdominus @0xdominus on x
@kimmonismus Hmm... The shovel seller is trying to own the gold mine now.
@kimmonismus @kimmonismus on x
Nvidia is reportedly spending $6 billion to build one of the world's most powerful open-weight AI models. According to the WSJ, Nvidia will license Poolside's technology and bring more than 100 of its employees into the Nemotron project. Nvidia is also investing another $1
@llmjunky @llmjunky on x
@MTSlive That's insane. I hope poolside is the right team to do this with. wasn't crazy about their first release but if this is true then i'm certainly pulling for them.
@shanumathew93 Shanu Mathew on x
Given all the headlines, had agents comb through NVIDIA's filings, company announcements and reported deals to map its 2026 involvement across the AI ecosystem. The main takeaway is how broadly NVIDIA is financing its own ecosystem. It is funding the labs and clouds buying
r/NvidiaStock r on reddit
NVIDIA IS GOING ALL-IN ON THE US-CHINA AI WAR
r/BetterOffline r on reddit
Nvidia Is Spending $6 Billion to Build a Powerful U.S. Alternative to Chinese AI

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