US chipmaker NVIDIA is reportedly in advanced discussions to acquire Israeli AI startup AI21 Labs. The potential acquisition could be valued between $2 billion and $3 billion, according to a news report. However, this information has not yet been confirmed.
According to Reuters, the negotiations point to NVIDIA’s appetite to expand its market share in AI software.
Established in 2017, AI21 Labs' most popular product line has been its large language models and enterprise-level generative artificial intelligence tools.
The Tel Aviv-based firm has built models targeting tasks such as generating longer-form text and supporting summarization and search. The most recent valuation for the firm stood at $1.4 billion as of its 2023 fundraising round, with investors including NVIDIA and Google.
Currently, AI21 has about 200 employees, including some of the best and brightest from elite Israeli military technology units and research institutes, which makes the company very appealing at this stage of the competition for top talent in AI.
NVIDIA has traditionally led the market for AI hardware solutions through its GPUs. At the same time, NVIDIA has been signaling an increased focus on creating an integrated AI stack that includes chips, software platforms, and AI services.
Acquisition of AI21 Labs would enable NVIDIA to build in-house expertise in foundational models and enterprise applications of artificial intelligence, directly competing with companies such as OpenAI, Google, and Meta, which are heavily investing in proprietary models.
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The possible acquisition will further enhance NVIDIA’s position in Israel, where the company currently maintains a substantial R&D presence, in addition to its plans for further growth. Israel is considered a global hotbed of AI and semiconductor talent.
NVIDIA and AI21 Labs have not issued any official statements regarding these negotiations. When finalized, this acquisition will be one of the biggest AI deals in the near future, driven by increased competition in the field.