Nvidia challenges Chinese LLMs: $6 billion to develop an open model with Poolside
American giant Nvidia has entered into a strategic agreement with AI startup Poolside, valued at $6 billion, aimed at creating a powerful open-weights model. This move is a direct response to the strengthening position of Chinese large language models, such as DeepSeek and Kimi K3, which are actively capturing the global market thanks to their accessibility and flexibility.
Deal details and strategic context
According to my data, the deal is structured as a licensing agreement: Nvidia will pay Poolside $6 billion for the rights to use AI models and will also offer employment to more than 100 startup employees. Additionally, the chipmaker intends to invest an additional $1 billion in developing this direction. This resembles Nvidia's recent acquisition of chip developer Groq, where for $20 billion the company obtained licenses and key specialists.
Such steps demonstrate Nvidia's clear strategy: shifting focus from simply selling chips to supporting the open-source ecosystem. The company seeks to democratize access to advanced technologies, preventing market concentration in the hands of a few closed giants. This also creates long-term demand for its own GPUs and AI systems, since open models require significant computing resources for training and inference.
A challenge for OpenAI and Anthropic
This agreement is not only a geopolitical maneuver but also a direct blow to the positions of American leaders like OpenAI and Anthropic. Open-weights models are significantly cheaper to operate and allow easy customization for specific business tasks. While closed counterparts require expensive API subscriptions and limit control over data, open solutions are becoming increasingly attractive to corporate clients.
Political pressure and the market
The deal comes amid renewed discussions in Donald Trump's administration about possible restrictions on the use of Chinese open-weight models. Earlier, 25 companies, including Nvidia, Meta, and Microsoft, opposed such measures, warning that bans would only push the market toward monopolization by closed developers. The discussion was particularly intensified by the release of Kimi K3, whose creators the White House accused of distilling Anthropic's Fable model.
My analysis: Nvidia's investments in open models are a forward-looking move that could reshape the balance of power in the AI industry. However, success will depend on Poolside's ability to create a model that truly surpasses Chinese counterparts in terms of price/quality ratio. Otherwise, $6 billion risks becoming merely an expensive gesture in a race where competitors are not standing still.