Nvidia Invests Over $900 Million to Acquire Enfabrica CEO and AI Startup Technology
Published: September 18, 2025
In a strategic move to bolster its artificial intelligence hardware capabilities, Nvidia has spent more than $900 million to bring Enfabrica’s CEO, Rochan Sankar, and other key employees on board, while also licensing the startup’s advanced technology. The deal, which was finalized last week, reflects a growing trend among major tech companies to acquire top talent and cutting-edge AI technologies through high-value transactions that blend cash and stock considerations.
Enfabrica’s Role in AI Hardware Innovation
Founded in 2019, Enfabrica has developed innovative technology that enables the interconnection of more than 100,000 graphics processing units (GPUs) to function as an integrated unit. This capability is critical for enhancing the performance and efficiency of large-scale AI computations. The startup’s technology aligns with Nvidia’s strategy of offering integrated systems around its industry-leading chips, allowing GPU clusters to operate cohesively as a single powerful computer.
Background and Context
Nvidia has been a central player in fueling the AI revolution that surged after OpenAI launched ChatGPT in late 2022. Its GPUs largely power the training of large language models and facilitate cloud providers in delivering AI services to their customers. While earlier Nvidia AI chips, such as the A100, were designed as single processors within servers, the company’s recent products now consist of tall racks housing 72 GPUs working in tandem. Such scalable systems are exemplified by the $4 billion AI data center equipment Microsoft recently announced in Wisconsin, which relies extensively on Nvidia technology.
Financial History with Enfabrica
Nvidia first invested in Enfabrica during the startup’s $125 million Series B funding round in 2023, led by Atreides Management. At that time, Enfabrica’s valuation had increased fivefold since its Series A raise. Subsequently, Enfabrica secured an additional $115 million funding round from key investors including Spark Capital, Arm, Samsung, and Cisco, with a post-money valuation around $600 million according to PitchBook data.
The Deal in Industry Perspective
This $900 million acquisition is reminiscent of recent talent-focused deals within the AI sector, where companies like Meta, Google, Microsoft, and Amazon have made similar moves to rapidly grow their AI talent pools and technology portfolios amid fierce competition. For example, Meta’s $14.3 billion investment in Scale AI earlier this year and Google’s $2.4 billion agreement for the AI coding firm Windsurf’s leadership and tech staff are among the largest of such deals. These acquisitions typically sidestep the complexities of full company takeovers while securing key assets and expertise.
Nvidia’s Broader Strategic Moves
Historically, Nvidia has been cautious with acquisitions; its largest deal to date was the $6.9 billion purchase of Israeli chip designer Mellanox in 2019. That acquisition laid the groundwork for critical networking technologies present in Nvidia’s current Blackwell AI product lineup.
After a failed attempt to acquire chip design company Arm in 2022 due to regulatory hurdles, Nvidia has continued to expand through targeted purchases, including a $700 million acquisition of Israeli AI infrastructure optimizer Run:ai. Recently, Nvidia announced one of its biggest investments—a $5 billion stake in Intel, aiming to collaborate on AI processors. The chipmaker also invested nearly $700 million in UK data center startup Nscale.
Looking Ahead
The addition of Enfabrica’s CEO Rochan Sankar and its technology is expected to strengthen Nvidia’s ability to provide customers with integrated, large-scale GPU systems tailored for next-generation AI applications. While Nvidia and Enfabrica declined specific comment on the transaction, industry analysts view this deal as a significant step in Nvidia’s continued AI leadership.
As AI continues to drive demand for ever-more powerful and efficient hardware, Nvidia’s latest strategic acquisition highlights the company’s commitment to staying at the forefront of AI innovation by combining in-house development with targeted investments in promising startups.
Reporting by Lora Kolodny, Jordan Novet, and Kif Leswing for CNBC.
