Nvidia Isn’t the Only Way to Win the AI Chip Race

Nvidia is investing $6 billion to license AI technology from Poolside and hiring its engineers to develop an open-weight AI model, competing with Chinese rivals like DeepSeek and Moonshot AI. Nvidia will also invest $1 billion in Poolside at a $12 billion valuation. Analysts suggest this move is a strategic response to competitive pressure from Chinese AI models, which have gained significant market share.

Nvidia (NVDA) is in talks to invest in Perplexity at a valuation above $30B, a 50% increase from its prior $20B valuation. Perplexity's revenue grew from under $250M to over $750M this year, driven by its Perplexity Computer product. The company plans a 2028 IPO, backed by Nvidia, Jeff Bezos, and SoftBank.

Nvidia began full production of Groq 3 LPX AI racks, acquired from startup Groq for $20B. The systems, designed for AI inference, will deploy at cloud provider Nebius. Each rack has 256 chips, generating 3,400 tokens/second. Nvidia aims to complement, not replace, GPUs with Groq tech. CEO Jensen Huang projects $1T in sales from Blackwell and Vera Rubin platforms by 2027. AMD is also entering the AI inference hardware market.

NVIDIA's AVO software improved Anthropic's Claude Opus 5 AI model to achieve a perfect score on the ARC-AGI-3 benchmark without retraining. AVO manages memory, plans tasks, and corrects errors, enhancing performance. The benchmark tests learning and adaptability in game-like environments. NVIDIA aims to make AI more reliable for enterprise use, potentially benefiting companies like Microsoft and Salesforce, as well as itself.

Nvidia agreed to pay $6 billion to license Poolside's AI software and invest $1 billion in the startup, acquiring over 100 engineers. Poolside's Model Factory software and talent will join Nvidia's Nemotron open-weight models. Nvidia previously executed a similar deal with Groq. Poolside's failure to secure $2 billion in funding highlights the importance of compute resources in the AI sector.

NVIDIA announced full production of its Groq 3 LPX AI inference accelerator chips, which boost token generation speeds for its Vera Rubin platforms. The chips enable 3,400 tokens per second, a record for the Gemma 4 31B model, and are being adopted by AI cloud providers like Nebius for advanced infrastructure.