Nvidia (NASDAQ:NVDA), the biggest company in the world, is in talks to acquire Reflection AI, the creator of open-weight models.
According to the Financial Times, talks between the two companies are still in their early stages and could take different forms. Nvidia could decide to "acqui-hire", where it would hire staff and license its technology, as it did with Groq. Such a move would help to prevent the regulatory review that the deal would attract.
Nvidia could also decide to increase its stake in the company. It may also decide to provide it with more chips and computing power. The FT, which cited people familiar with the matter, said that the deal could be completed in the next few weeks.
A move to acquire Reflection AI would require substantial capital since the company was valued at $25 billion in the last funding round. It would be much higher than the $13 billion that Nvidia paid for Hugging Face. In addition to Nvidia, other investors in the company are Sequoia Capital, DST Global, Lightspeed Venture, and 1789 Capital.
A move by Nvidia to acquire Reflection would be a bet in the so-called open-source AI models that are growing in popularity. Among the most popular of these companies are from China like Moonshot, Qwen, and DeepSeek.
Reflection AI recently launched its first model, known as Beam, which focuses on coding and agentic performance. In the statement, the company said that the model advances Western open-weight frontier and is competitive with existing models.
Reflection AI is burning substantial sums of money as it advances its business. It is paying SpaceX (NASDAQ:SPCX) $150 million a month. It has also inked deals with Nebius (NASDAQ:NBIS) and Shinsegae Group.
Nvidia, on the other hand, is betting across all areas in the AI boom. It has spent billions of dollars investing in AI companies like OpenAI and Anthropic. Additionally, it is a big investor in neocloud companies like Nebius, CoreWeave, IREN, Lambda, Nscale.
The company also invested in companies in optics and photonics like Coherent and Lumentum. It is also a big investor in SoundHound, Arm Holdings, and Marvell Technologies.
Nvidia has the financial resources to make these investments. It ended the last quarter with over $99.9 billion in cash and short-term investments and is making billions of dollars in free cash flow a year.
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