In a bid to strengthen its AI research capabilities and stay ahead in the generative AI arms race, Nvidia is reportedly in advanced discussions to acquire AI21 Labs, the Israeli startup known for developing sophisticated large language models. The deal, which could be valued between $2 billion and $3 billion, appears to be driven primarily by the desire to bring AI21’s roughly 200 highly specialized engineers and researchers into Nvidia’s ecosystem, reports Calcalist. This comes just days after the Jensen Huang-led company reportedly struck a deal to bring in talent from Groq, another AI hardware and research startup, showing Nvidia’s aggressive push to consolidate top AI expertise across both hardware and software.
AI21 Labs, founded in 2017 by Amnon Shashua, Yoav Shoham, and Ori Goshen, has steadily built a reputation for pushing the boundaries of natural language processing. The company focuses on large language models and enterprise AI tools, developing systems capable of complex text generation and understanding tasks. While AI21 has not reached the scale of revenue or recognition of giants like OpenAI, its technical talent and research capabilities have made it a valuable player in the AI landscape. Notably, the startup has previously secured investment from major tech firms, including Nvidia and Google.
The potential acquisition appears to be less about AI21’s commercial products and more about its talent pool, signaling a classic acquihire. With an implied cost of roughly $10-15 million per employee at the upper end of the valuation range, Nvidia is making a clear statement about the value it places on world-class AI researchers capable of advancing next-generation models.
Most importantly, if finalized, the deal would further strengthen Israel’s role as a strategic hub for Nvidia. Over the past decade, Nvidia has made multiple acquisitions in the country, most notably the $7 billion purchase of Mellanox, which boosted its data center and networking capabilities. And now, AI21 would mark yet another step in Nvidia’s long-term strategy to expand its research and development footprint near Tel Aviv, where the company expects to build a campus that could host thousands of AI researchers and engineers over the next several years.
The move also comes at a time when companies around the world, including in the United States, Europe, and Israel, are racing to hire top AI talent capable of building and scaling LLMs. For Nvidia, which has long been a leader in hardware, bringing AI21’s team on board could speed up its efforts not just in GPU infrastructure for AI training and inference, but also in developing core AI models, enterprise AI tools, and next-generation AI research.
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