Nvidia is in advanced discussions to acquire Israeli AI startup AI21 Labs in a deal reportedly valued between $2 billion and $3 billion. This would represent a significant premium over AI21’s last known $1.4 billion valuation from a 2023 fundraising round. The talks have reached senior leadership at Nvidia, underscoring the strategic importance of AI21’s large-scale language model technology as Nvidia seeks to bolster its AI software portfolio alongside its market-leading chip business.

A key driver for Nvidia’s interest in AI21 is its 200-person workforce, composed of PhD-level researchers and engineers with expertise in large language model development. Earlier this year, AI21 completed an unconfirmed $300 million round led by Nvidia and Google. Concurrently, Nvidia plans to expand its Israeli footprint with a new R&D campus capable of housing up to 10,000 employees, reflecting CEO Jensen Huang’s description of Israel as the company’s “second home.”

The potential acquisition follows Nvidia’s recent $20 billion agreement for Groq’s inference technology and a $5 billion equity purchase in Intel, both aimed at strengthening its AI infrastructure ecosystem. These moves come as competitors such as Meta, Google and Microsoft finalize their own AI-related deals to integrate advanced models into cloud services, subscription offerings and edge computing products, highlighting Nvidia’s efforts to maintain leadership across multiple AI value chains.