Nvidia is in early discussions to either increase its investment in Reflection AI or potentially acquire the US-based open-source AI start-up, the Financial Times reported, citing sources familiar with the matter.
Reflection AI, which develops open-weight models, is already backed by Nvidia as one of its major shareholders.
The negotiations are said to offer multiple possible outcomes, including a full acquisition, additional equity investment, or an “acqui-hire” arrangement where Nvidia would hire key staff and license technology.
Such an approach could avoid the regulatory complexities typically associated with traditional acquisition processes.
No final agreement has been reached, and people close to the matter have indicated the talks could yet fall through.
Discussions about the terms are ongoing, and specifics have not been confirmed.
Nvidia’s existing investment in Reflection AI amounts to $800m. Other investors include Disruptive, Sequoia Capital, and 1789 Capital, the latter of which counts Donald Trump Jr, among its partners.
Reflection AI was last valued at $25bn, based on a funding round completed in March.
Open-weight AI models, such as those being developed by Reflection AI, are viewed by some in the US government as important for providing alternatives to more affordable Chinese AI products.
The company recently revealed its first public, customisable AI product, which operates using Nvidia hardware.
Reflection AI has also entered partnerships with US defence and energy agencies and has agreements to develop AI models for countries including South Korea.
While Nvidia already offers its own open-weight AI model family known as Nemotron, the company does not have a large-scale frontier model.
Nvidia has placed increasing emphasis on supporting open-weight models that users can run and tailor on their own systems, which some businesses consider less costly than using advanced products from OpenAI or Anthropic.
Acqui-hire deals have become more common in the wider technology sector as companies seek to avoid regulatory scrutiny over acquisitions involving AI.
Nvidia previously used a similar approach in a deal with chip designer Groq, valued at $20bn, which is now the subject of legal action from former Groq employees.
Nvidia has undertaken a series of significant investments in the AI sector over the past two years.
Last month, the company agreed to acquire Hugging Face, a major repository for models and datasets, for $13bn.
The company continues to direct substantial resources into AI laboratories and related businesses, in turn fuelling demand for its semiconductor products.
