What Nvidia Buys Without Buying the Company

Nvidia has structured two reported multibillion-dollar AI deals in nine months without acquiring either company, and is now reportedly discussing an investment in a third. The pattern raises a question for anyone who holds private shares or reads secondary-market indications: when one of the largest buyers in AI stops buying companies and starts buying technology, assets, and teams, what does a share of what's left represent?

What Nvidia buys without buying the company

The Information reported this weekend that Nvidia is discussing an investment in Perplexity at a valuation above $30 billion. Before settling on equity, Nvidia reportedly explored licensing Perplexity's technology instead. A license would have been Nvidia's third such structure in nine months, after Groq in December and Poolside last week.

The $27 billion in the headline is the sum of two reported transactions: roughly $20 billion for Groq and roughly $7 billion in combined license and investment for Poolside. Neither company has confirmed the full terms. The reported Perplexity talks are not included in that figure.

From Groq to Poolside, Nvidia keeps testing the form

In December, CNBC reported an approximately $20 billion transaction involving Nvidia, its largest deal on record, for what the companies described as a non-exclusive license to Groq's inference technology, along with substantially all of its assets. Founder and CEO Jonathan Ross, president Sunny Madra, and other senior leaders joined Nvidia. GroqCloud stayed behind with the remaining company, which promoted its finance chief, Simon Edwards, to chief executive. The reported price was roughly three times the $6.9 billion valuation Groq set in a September 2025 round.

Last week, Newcomer reported the Poolside version: a $6 billion non-exclusive license for the startup's Model Factory software, a $1 billion investment at a $12 billion pre-money valuation, and offers to 109 employees who built its Laguna model. Poolside's shareholder letter called the deal "not an acquisition and it is not an acquihire." The company's own account of how it got there is blunter: it had six weeks to raise $2 billion for a 40,000-GPU cluster. It missed the deadline and lost the cluster.

Perplexity is the third track. According to the reporting, the current talks center on a straight equity round above $30 billion. Perplexity last raised at $20 billion in September 2025, and its annualized revenue has reportedly grown from under $250 million to more than $750 million this year, according to The Information. No agreement has been announced, and the talks may not produce one. Bloomberg also reported early Nvidia talks with Rebellions, the Korean inference-chip designer, about a partnership, investment, or acquisition. That is another set of talks still taking shape.

What the completed deals share is what did not happen: Nvidia did not take control of either company, and shareholders who were not selling did not automatically receive a merger price. A non-exclusive license may also avoid the standard premerger notification an acquisition could require, though regulators can still scrutinize these arrangements. The trade press has repeatedly described that as a design feature. One analyst told CNBC that the Groq structure kept "the fiction of competition alive."

Reported private-company financials and secondary-market indications may be unaudited, incomplete, non-standard, or based on limited transaction activity. They should not be relied upon as fair value, executable pricing, or a basis for any investment decision.

The 2024 versions ended three different ways for shareholders

The structure has a short track record. Microsoft ran an early version on Inflection AI in March 2024: a reported $620 million licensing payment plus a $33 million legal waiver, while hiring the co-founders and most of the staff. Inflection's investors reportedly received about 1.5x on the early $225 million round and about 1.1x on the later $1.3 billion round, from a company last valued at $4 billion. The company continued under a new CEO and pivoted to enterprise sales.

Google ran another version on Character.AI in August 2024. Alphabet later disclosed a $2.7 billion cash payment for a non-exclusive license, while Noam Shazeer and other employees returned to Google. The payment reportedly funded liquidity for investors and employees at around $2.5 billion, above the $1 billion mark from the company's 2023 round.

Windsurf, in July 2025, got the most convoluted version. OpenAI's agreed $3 billion acquisition collapsed, Google paid roughly $2.4 billion to license the technology and hire the CEO and co-founder, and Cognition acquired what remained days later. Cognition said every remaining employee would participate financially and receive accelerated vesting.

These companies differed in stage, revenue, and negotiated terms, so the multiples do not transfer from one to another. The range is the finding. Shareholder outcomes in reverse acquihires have run from roughly 1.1x against the last mark to liquidity above it. The difference was set by terms that rarely appeared in the headline number: waiver payments, distribution mechanics, and vesting treatment.

(These are reported transaction-specific shareholder outcomes and should not be viewed as investment performance, expected returns, or indicative of outcomes in other private-company transactions.)

Groq shareholders reportedly received distributions before the continuing company raised at $3.5 billion

The freshest evidence for how these transactions split value came this month. TechCrunch reported that the continuing Groq, minus the founder, senior leaders, and licensed technology that went to Nvidia in December, raised $350 million at a $3.5 billion valuation, led by Disruptive, with Nvidia reportedly planning to participate. Combined with a reported $650 million round in June, the surviving business has raised about $1 billion this year. It now operates as an inference cloud running its own processors alongside Nvidia hardware.

That $3.5 billion valuation is not a simple markdown of the old Groq shares. Axios reported that most shareholders would receive staged per-share distributions tied to the $20 billion transaction. Follow-up reporting said existing holders would receive their remaining distributions and then have the opportunity to invest in the continuing company.

Set side by side, the numbers show the split. Groq priced at $6.9 billion last September. Nvidia reportedly paid about $20 billion in December, funding distributions to existing holders. The continuing business then raised at $3.5 billion in August, after losing senior leaders and changing from an independent chip challenger into a cloud operator. The headline transaction value and the valuation of what survived were never the same number.

Reported private-company financials and secondary-market indications may be unaudited, incomplete, non-standard, or based on limited transaction activity. They should not be relied upon as fair value, executable pricing, or a basis for any investment decision.

A license fee is not a per-share price

An acquisition usually puts one deal value at the center, though what each holder receives can still depend on preferences, rollover, and other terms. These licensing structures unbundle the value further. License fees flow to the company's balance sheet and may later fund shareholder distributions. Hiring packages flow to individual employees. A primary equity investment changes the cap table and generally dilutes existing holders rather than buying their shares.

The reported Perplexity talks suggest that these structures are no longer limited to startups in obvious distress. For shareholders, the useful implication is less dramatic than the headline: the amount attached to the announcement may describe consideration that does not flow directly through the shares. Poolside's reported $12 billion pre-money mark arrived in the same transaction that moved its model team and core software rights to Nvidia. One interpretation worth tracking is that the undisclosed terms may matter as much as the valuation: who receives the license fee, whether the company distributes any of it, what happens to vesting, and whether existing holders receive liquidity.

There is a fair case for the structure from the shareholder's side. The cash is real. Poolside's reported $7 billion in combined license and investment followed a failed raise, and the alternative may have been a down round or worse. Non-exclusive licenses leave the assets in place. The continuing company can keep operating; Groq reports serving more than six million developers. Its existing holders reportedly received distributions before the business raised again. In the Character.AI precedent, holders reportedly received liquidity above the prior mark. A reverse acquihire may rescue more value than it removes. Whether it did in any given deal depends on terms outsiders may never see.

Reported private-company financials and secondary-market indications may be unaudited, incomplete, non-standard, or based on limited transaction activity. They should not be relied upon as fair value, executable pricing, or a basis for any investment decision.

For more company information, recent coverage, and available market data, visit Perplexity on Augment.

📈 Data Point of the Day

1.1x

That is what investors in Inflection AI's later $1.3 billion funding round reportedly received when Microsoft licensed the company's technology and hired most of its staff in 2024, against a last private valuation of $4 billion. Earlier investors reportedly received about 1.5x. The company was never acquired.

Reported private-company financials and secondary-market indications may be unaudited, incomplete, non-standard, or based on limited transaction activity. They should not be relied upon as fair value, executable pricing, or a basis for any investment decision.

🎓 From the Manual

Reverse acquihire

A transaction in which a large company licenses a startup's technology and hires its founders or key employees without acquiring the company itself. The consideration may be split among a license fee paid to the company, compensation paid to departing employees, and, in some cases, distributions or liquidity for existing shareholders. Because no change of control occurs, the transaction may fall outside the standard premerger notification required for an acquisition, though competition authorities can still review the arrangement.

Depending on the structure and applicable law, such a transaction may be subject to different merger-control or premerger-notification requirements than an acquisition. Regulatory authorities may nevertheless review the arrangement.

See what's trading on the secondary market: augment.market.