TLDR
- Nvidia is investing up to $1 billion in Poolside, an AI startup specializing in coding automation tools
- The deal could push Poolside’s valuation to $12 billion as part of a $2 billion fundraising round
- This marks Nvidia’s second investment in Poolside within a year after backing the company’s Series B in October 2024
- NVDA stock fell 2% Thursday but remains up over 50% year-to-date with analysts targeting 14.81% upside
- Poolside plans to use funding to purchase Nvidia’s GB300 chips for its expanding data center operations
Nvidia is doubling down on Poolside with plans to invest up to $1 billion in the French AI startup. The investment comes less than a year after Nvidia first backed the company.
Bloomberg News reports the deal could quadruple Poolside’s valuation to around $12 billion. The startup is raising $2 billion in total funding.
Nvidia’s investment will start at approximately $500 million. It could reach the full $1 billion if Poolside hits its fundraising targets.
The startup has already locked in over $1 billion in commitments. Existing investors are contributing roughly $700 million to the round.
Neither company has commented on the reports. No official announcement has been made yet.
Why This Investment Matters
Poolside builds AI models that automate coding tasks. The technology helps developers write and optimize software faster.
Nvidia backed Poolside’s $500 million Series B round in October 2024. This new investment shows continued confidence in the startup’s technology.
The strategy makes business sense for Nvidia. Sources indicate Poolside will use part of the funding to buy Nvidia’s GB300 chips.
This creates a win-win situation. Nvidia invests in promising AI companies that then become customers for its chip technology.
Poolside recently partnered with CoreWeave to build one of America’s largest data centers. The new funding will support this infrastructure expansion.
Building an AI Ecosystem
Nvidia has been actively investing across the AI startup landscape. The company is creating a network of AI companies dependent on its hardware.
This approach secures future demand for Nvidia’s products. It also strengthens the company’s dominance in AI computing.
The timing aligns with Nvidia’s growth projections. The company expects global data center spending to jump from $600 billion in 2026 to $3 trillion to $4 trillion by 2030.
By backing companies like Poolside now, Nvidia positions itself to capture this massive growth wave.
Stock Performance and Outlook
Nvidia briefly hit a $5 trillion market cap Wednesday during its GTC Conference in Washington, D.C. The company announced several new partnerships at the event.
Shares dropped over 2% Thursday after a Trump-Xi summit produced no updates on China chip sales. Despite this pullback, NVDA stock is up more than 50% this year.
Wall Street remains bullish on the stock. Analysts give NVDA a Strong Buy rating based on 36 Buys, one Hold, and one Sell.
The average price target stands at $232.94. This represents 14.81% upside from current trading levels.
Nvidia is still waiting for approval on its China export license. The Trump administration revoked it earlier this year, though the company has reapplied.
Poolside has secured over $1 billion in commitments from investors for its $2 billion funding round at a $12 billion pre-money valuation.