Nvidia is reportedly in talks to acquire Israeli artificial intelligence (AI) startup AI21 Labs.
AI21 is one of the few startups in Israel developing a large-scale language model for artificial intelligence, according to Israeli tech publication Calcalist on Tuesday, December 30.
The deal could be valued between $2 billion and $3 billion. This is an increase from AI21’s last known valuation of $1.4 billion, which was reached during a fundraising round in 2023.
PYMNTS reached out to Nvidia for a comment but has not received a response yet.
AI21 completed a $300 million fundraising round earlier this year, led by Nvidia and Google, although the round was never officially confirmed. Estimates suggested that the valuation had not significantly increased since the 2023 funding.
The report also mentioned that AI21 had been seen as a potential acquisition target for Google, but negotiations with Nvidia have recently progressed to reach the company’s top management.
Nvidia’s main interest in AI21 seems to be its 200-person workforce, which includes individuals with advanced degrees and specialized skills in AI development, according to the Calcalist report.
Calcalist noted that AI21 has struggled to keep up with advancements from major AI companies. Earlier this year, the company halted development of Wordtune, its AI reading and writing assistant for consumers.
In a separate report, the publication stated that Nvidia plans to expand in Israel with a new research and development campus that could employ up to 10,000 people. Nvidia CEO Jensen Huang has referred to Israel as the chipmaker’s “second home.”
This potential acquisition comes as several Big Tech companies are finishing the year with similar deals aimed at integrating AI more deeply into their products, infrastructures, and monetization strategies, as PYMNTS mentioned on Tuesday.
“Meta’s acquisition of Manus adds millions of paying users and signals a sharper focus on subscription-based consumer AI, while Google, Amazon, and Microsoft are launching new models and platforms across edge computing, smart homes, and climate data,” the report stated.
Additionally, this week, Nvidia completed a purchase of $5 billion worth of shares in Intel as part of a broader tech partnership.
This announcement followed shortly after the Federal Trade Commission (FTC) indicated that regulators had approved the planned investment, seen as a significant endorsement of Intel from $4 trillion Nvidia.
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Source: https://www.pymnts.com/