Nvidia Invests Over $900 Million to Acquire Enfabrica CEO and AI Startup Technology
In a significant move to bolster its artificial intelligence capabilities, Nvidia has reportedly spent more than $900 million to hire Rochan Sankar, the CEO of AI hardware startup Enfabrica, along with other key employees. The deal also includes licensing Enfabrica’s advanced technology, according to sources familiar with the arrangement. This acquisition, which closed last week, underscores Nvidia’s ongoing commitment to expanding its influence in the AI sector.
The transaction, involving both cash and stock components, is reminiscent of recent “acquihires” executed by major tech companies such as Meta and Google. These acquisitions focus on securing top AI talent and proprietary technologies to maintain competitive edge while circumventing regulatory complexities associated with full company purchases.
Enfabrica, founded in 2019, develops groundbreaking technology designed to connect over 100,000 GPUs into unified clusters. Such integration allows GPUs to function collectively as a single high-powered computing system — a capability that aligns closely with Nvidia’s objective to create highly efficient, scalable AI hardware solutions. Nvidia’s GPUs currently serve as critical components powering large language models and AI services offered by prominent cloud providers, following the AI boom triggered by OpenAI’s ChatGPT launch in late 2022. Prior to the acquisition, Nvidia had already invested in Enfabrica during a $125 million Series B funding round in 2023 led by Atreides Management. That funding round boosted Enfabrica’s valuation significantly, reportedly rising fivefold from its Series A round. Later in 2023, the startup secured an additional $115 million from investors including Spark Capital, Arm, Samsung, and Cisco, reaching an approximate valuation of $600 million.
Nvidia’s strategic investment and acquisition spree marks a departure from its historically cautious approach to major buyouts. Aside from its high-profile $6.9 billion acquisition of Mellanox in 2019, Nvidia has generally focused on investments and smaller strategic deals, such as the $700 million acquisition of Israeli AI infrastructure software maker Run:ai. However, the current investment strategies underscore a shift to securing critical AI infrastructure expertise and technology, supporting Nvidia’s product innovations like its Blackwell chip lineup.
This deal gains further context amid a wave of competitive hires and acquisitions among leading AI-focused tech giants. Meta’s $14.3 billion deal in June to acquire Scale AI’s founder and team, Google’s $2.4 billion acquisition of Windsurf’s CEO and talent, as well as similar moves by Microsoft and Amazon, reflect a broader industry trend emphasizing rapid integration of cutting-edge AI talent and technology.
Alongside the Enfabrica acquisition, Nvidia recently announced a landmark $5 billion stake acquisition in Intel, with plans for collaborative AI processor development. Nvidia also invested approximately $700 million in UK-based data center start-up Nscale, further broadening its AI ecosystem investments.
While neither Nvidia nor Enfabrica provided official comments regarding this transaction, the acquisition represents a clear signal that Nvidia is intensifying efforts to consolidate its dominance over AI hardware infrastructure by incorporating advanced networking and GPU cluster management technologies.
As the AI market continues to heat up and demand for scalable, efficient AI computing grows exponentially, Nvidia’s deepening investment in innovative startups like Enfabrica positions the company to remain at the forefront of AI infrastructure development, powering the next generation of AI applications globally.
