Nvidia has completed a deal worth over $900 million to acquire key talent and technology from Enfabrica, a startup specializing in AI hardware infrastructure. The transaction includes hiring Enfabrica’s CEO, Rochan Sankar, and other employees, along with licensing the company’s advanced networking technology. The deal, which closed last week, involves a mix of cash and stock, according to two people familiar with the matter who requested anonymity due to its private nature. Enfabrica, founded in 2019, developed technology capable of connecting more than 100,000 GPUs into a single, high-performance computing system. This capability is critical for scaling AI training workloads, especially as companies build massive data centers to support generative AI models. Nvidia’s GPUs have been central to the AI boom since the release of ChatGPT in late 2022, and its latest Blackwell-based systems are designed as large-scale racks with up to 72 GPUs working in unison—ideal for powering next-generation AI applications. The acquisition strengthens Nvidia’s ability to deliver integrated AI systems, where its chips are paired with optimized networking solutions to function as unified supercomputers. This is particularly relevant for large-scale deployments like Microsoft’s recently announced $4 billion data center in Wisconsin, which relies on Nvidia’s infrastructure. Nvidia had previously invested in Enfabrica during its $125 million Series B round in 2023, led by Atreides Management. The company raised another $115 million in late 2023 from investors including Spark Capital, Arm, Samsung, and Cisco, bringing its post-money valuation to around $600 million, according to PitchBook. This move follows a broader trend among tech giants to secure top AI talent through acquihires—transactions that prioritize hiring key engineers and researchers over traditional acquisitions. Meta’s $14.3 billion deal for Scale AI, Google’s $2.4 billion acquisition of Windsurf’s leadership team, and similar deals by Microsoft and Amazon highlight the intense competition for AI expertise. While Nvidia has been a major investor in AI startups and infrastructure, it has historically avoided large-scale acquisitions. Its largest deal to date was the $6.9 billion purchase of Mellanox in 2019, which provided the networking technology behind its current AI systems. The failed attempt to acquire Arm in 2022 underscored regulatory hurdles in the industry. In recent months, Nvidia has made strategic moves to expand its ecosystem, including a $700 million acquisition of Run:ai and a $5 billion investment in Intel, along with a collaboration on future AI processors. The Enfabrica deal marks Nvidia’s most significant talent and technology acquisition to date, signaling its intent to maintain dominance in the AI hardware space.