Nvidia in talks to acquire open-source AI startup Reflection AI to challenge China’s DeepSeek

Nvidia is in early talks to acquire Reflection AI, a U.S. artificial intelligence startup valued at $25 billion, as the chip giant looks to strengthen America’s position against Chinese AI rivals such as DeepSeek. The potential deal could give Nvidia something it has yet to build on its own: a leading U.S. developer of advanced open-weight AI models.

The discussions could result in a full acquisition, a larger investment, or an arrangement that gives Nvidia access to Reflection’s researchers and technology, the Financial Times said on Saturday.

“Nvidia is in talks to acquire or deepen its investment in US start-up Reflection AI, a developer of open-weight models that President Donald Trump’s administration hopes will rival cheap Chinese alternatives,” the Financial Times reported, citing people with direct knowledge of the matter.

Nvidia has already invested $800 million in Reflection AI, making it one of the startup’s largest financial backers. The company was last valued at $25 billion, though no proposed acquisition price has been disclosed.

The talks remain preliminary, and no agreement is guaranteed. Nvidia and Reflection AI declined to comment on the FT report.

One possibility is an *acqui-hire*, a deal in which Nvidia hires key employees and licenses a company’s technology instead of buying the business outright. Such arrangements have become increasingly attractive to technology giants seeking access to AI talent without the lengthy regulatory reviews associated with traditional acquisitions.

Nvidia used a similar structure in its $20 billion agreement with AI chip startup Groq in December.

The interest in Reflection comes as Nvidia moves beyond selling the chips that train and run AI models. The company already develops its own Nemotron family of open-weight models, but a deal with Reflection could bring it closer to competing directly with leading AI developers.

Why Reflection AI matters in the U.S.-China AI race

Founded in 2024 by former Google DeepMind researchers Misha Laskin and Ioannis Antonoglou, Reflection AI has emerged as a closely watched American challenger to China’s growing collection of inexpensive, high-performing AI models.

The two founders previously worked on Google’s Gemini AI research, giving Reflection deep technical experience in developing advanced AI systems.

The startup recently introduced Beam, its first publicly available open-weight AI model, designed to compete with Chinese offerings in coding and AI agent tasks.

Reflection claims Beam delivers performance comparable to GLM-5.2 from Chinese AI developer Z.ai. Those performance claims have not been independently established across all applications.

Unlike closed models such as OpenAI’s most advanced proprietary systems, open-weight models let developers download model parameters, customize deployments, and run the software on their own infrastructure, subject to licensing restrictions. That flexibility can reduce operating costs and give businesses greater control over sensitive data.

China’s DeepSeek helped accelerate interest in this approach by demonstrating that capable AI models could be developed and deployed at costs that challenged assumptions about the resources needed to compete.

For Nvidia, the strategic appeal is clear. More capable open models could encourage businesses to run AI on their own infrastructure, creating additional demand for Nvidia’s chips.

Reflection’s importance extends beyond commercial AI. The startup has established relationships with the Pentagon and the U.S. Department of Energy and entered agreements to develop AI models for American allies, including South Korea.

The Trump administration has expressed interest in strengthening domestic alternatives to Chinese open-weight models, making Reflection a potentially significant player in Washington’s broader AI ambitions.

TechStartups previously covered Reflection AI in March, when reports emerged that the Nvidia-backed startup was seeking $2.5 billion in funding at a $25 billion valuation. The company counts Sequoia Capital, Disruptive, and 1789 Capital, where Donald Trump Jr. is a partner, among its investors.

Nvidia’s interest comes as the company continues investing heavily in AI developers, cloud infrastructure providers, and businesses that depend on its chips.

An acquisition would represent a significant shift for the chipmaker. Rather than supplying the hardware behind the AI industry, Nvidia would gain greater control over the models running on that hardware.

For Reflection, a deal could provide access to the computing resources and capital needed to compete with much larger AI companies.

The bigger question is whether Nvidia wants to remain the industry’s dominant chip supplier or become a major competitor in developing the AI models those chips run.

Reflection AI founders