Nvidia signed a $6 billion licensing deal with AI startup Poolside and is hiring more than 100 of its employees, even as the chipmaker's stock fell more than 2% Monday. Nvidia is also weighing an investment in Perplexity and plans to raise AI computer product prices 15% to 17% early next year.
Nvidia stock fell more than 2% to 209.83 in late morning trading Monday, even as the company pushed deeper into AI software. The drop came as Nvidia finalized a $6 billion licensing deal with AI startup Poolside to build an open-weight AI model meant to compete with Chinese rivals.
The chipmaker is also hiring more than 100 of Poolside's employees to join its Nemotron project, which aims to improve its largest open-weight models. According to the Wall Street Journal, Nvidia agreed to invest $1 billion in Poolside, giving the startup a pre-money valuation of about $12 billion. The arrangement echoes Nvidia's deal with chip startup Groq, announced in December, which also paired a large licensing payment with hiring of key personnel.
Nvidia Stock Drops
Chip stocks broadly struggled Monday. The Philadelphia semiconductor index, known as SOX, dropped more than 3% in recent trading. Mizuho Securities trading-desk analyst Jordan Klein said in a client note that Nvidia is spreading its bets across the evolving AI industry with the Poolside deal, arguing the company benefits when pricing power in AI models stays spread across many developers rather than concentrated in one or two dominant players.
Perplexity Talks and Price Hikes
The Information reported Sunday that Nvidia is in talks to invest in AI search engine operator Perplexity, whose current funding round would raise its valuation to $30 billion. Meanwhile, Nvidia is planning to raise prices 15% to 17% for its AI computer products early next year, citing higher memory costs.
Nvidia's next potential catalyst is its fiscal second-quarter report, due late Wednesday. Wedbush Securities analyst Matt Bryson said supply, not demand, remains the limiting factor for Nvidia in the quarter, and he reiterated an outperform rating with a 12-month price target of 330.
Source: Investor's Business Daily
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