Nvidia Invests $900 Million in AI Networking Startup Enfabrica

Nvidia has invested over $900 million to hire Enfabrica CEO Rochan Sankar and other key personnel, as well as to license the startup's technology. The transaction, finalized last week, involved a combination of cash and stock, and Sankar has already joined Nvidia.

Enfabrica, a Silicon Valley-based company founded in 2019 by former Broadcom and Alphabet employees, specializes in networking solutions for artificial intelligence (AI) data centers. The company's technology enables efficient networking of up to 100,000 AI computing chips, addressing performance degradation issues that arise when connecting large numbers of processors. In July, Enfabrica launched a chip-and-software system designed to reduce memory chip costs in AI data centers.

Nvidia's investment in Enfabrica is part of a broader trend among tech giants to acquire AI talent and technology. In June, Meta took a 49% stake in Scale AI and brought in its CEO, Alexandr Wang, to play a prominent role in the company's AI strategy. Similarly, Google's hiring spree from AI company Windsurf followed an acquisition attempt by OpenAI.

By integrating Enfabrica's innovations, Nvidia aims to enhance the scalability and performance of its AI infrastructure, potentially reducing costs and improving efficiency for large-scale AI applications. This move underscores the increasing importance of efficient networking solutions in AI data centers and reflects a broader industry trend of investing heavily in AI startups to secure top talent and cutting-edge technologies.

Neither Nvidia nor Enfabrica provided comments on the deal.