Nvidia in talks to invest in AI data startup Mercor at $20 billion valuation

Nvidia is in talks to invest in Mercor, the AI data startup whose valuation could double to $20 billion less than a year after its last major funding round, according to a report from The Information.

The potential investment would make Nvidia a financial backer of a company that already supplies specialized data and human expertise used to develop the chipmaker’s open-source AI models. Existing Mercor investor General Catalyst has been in discussions to lead the new round, according to the report. Talks are still preliminary, and a deal has not been finalized.

“Nvidia has discussed an investment in Mercor, a data labeling provider that helps the chip designer develop its open-source AI models, according to a person with knowledge of the process. The investment would be part of a $20 billion-valuation round. Existing investor General Catalyst has been in talks to lead the round,” The Information reported.

The discussions come weeks after Bloomberg reported that Mercor had received at least one term sheet valuing the San Francisco startup at roughly $20 billion. At the time, fundraising talks were described as early, with terms still subject to change.

A deal at that price would mark another stunning jump for one of the fastest-growing companies supplying the AI industry.

How Three College Dropouts Built an AI Startup That Went From $10 Billion to a Potential $20 Billion Valuation

Mercor Founders

Mercor was founded in 2023 by Brendan Foody, Adarsh Hiremath, and Surya Midha, three young founders who started out building AI software for hiring. The company later shifted its focus to a problem becoming increasingly valuable to AI labs: finding highly skilled people who can help train and evaluate advanced models.

That shift paid off.

In October 2025, Mercor raised $350 million in a Series C led by Felicis Ventures at a $10 billion valuation. Benchmark, General Catalyst, and Robinhood Ventures participated in the round. The deal made Foody, Hiremath, and Midha, all 22 at the time, the world’s youngest self-made billionaires.

A $20 billion valuation would double Mercor’s valuation in less than a year.

Mercor sits in a part of the AI stack that has gained new importance as model developers search for better training material than the vast collections of internet text that fueled earlier generations of AI.

The company connects AI labs with lawyers, doctors, engineers, bankers, scientists, and other specialists who create, review, label, and evaluate data. Their work can feed reinforcement learning, model evaluations, benchmarks, and simulated environments meant to teach AI systems how to handle difficult professional tasks.

That business has attracted some of the biggest names in AI. Mercor has worked with companies including OpenAI, Anthropic, Meta, and Nvidia.

Its growth has followed the surge in demand. By mid-2026, Mercor was reporting annualized gross billings in the billions, with net revenue lower after payments to contractors. The company manages a network of tens of thousands of experts and has pushed deeper into reinforcement-learning environments and specialized AI benchmarks.

For Nvidia, an investment would fit a much broader strategy. The chip giant has invested in companies across the AI stack, from model developers to infrastructure startups. Mercor is particularly interesting since its experts already contribute to Nvidia’s open-source model efforts, including work surrounding its Nemotron family.

The relationship illustrates a shift happening beneath the AI boom. Chips remain scarce and expensive, but advanced models need something GPUs cannot manufacture: reliable human judgment.

As models move deeper into medicine, law, finance, engineering, coding, and scientific research, the quality of the people teaching and testing those systems can matter as much as the quantity of data available.

That helps explain why investors may be willing to put a $20 billion price tag on a company that barely existed three years ago.

For now, the Nvidia investment remains under discussion. Neither Nvidia nor Mercor has publicly confirmed a deal, and fundraising terms could still change. If the round closes near the reported valuation, Mercor will have gone from a young hiring startup to a $20 billion AI data company in roughly three years, one of the more striking ascents of the current AI boom.