Jensen Huang and Masayoshi Son The dealmakers in the artificial intelligence sector showed no signs of slowing down during the holiday season. Meta Platforms, Inc. announced this afternoon the acquisition of Singapore-based AI agent developer Manus, with the transaction price remaining undisclosed. However, given that Manus was valued at approximately $500 million in its last funding round, the acquisition price by Meta is likely around $2 billion, not significantly higher.
Meanwhile, SoftBank announced today a $4 billion acquisition of data center investment firm DigitalBridge, demonstrating that CEO Masayoshi Son's appetite for large-scale acquisitions remains undiminished—even after a recent series of major deals. This inevitably raises the question: is there any upper limit to Son's acquisition budget?
Turning to NVIDIA CEO Jensen Huang, he has little need to finance acquisitions through debt, given that NVIDIA's business operates like a veritable "money-printing machine" (a jest, of course, referring to the immense profitability of its AI chip division). Unlike the high-profile SoftBank, NVIDIA prefers not to loudly broadcast every transaction. For instance, news of its $2 billion acquisition of the struggling competitor Groq quietly emerged on Christmas Eve.
The timing of the deal's disclosure, coupled with the notably sparse public statements from both companies, suggests they had hoped the transaction would slip through unnoticed amidst the holiday festivities. After all, NVIDIA likely prefers to avoid extensive external scrutiny questioning why the undisputed global leader in AI chips is acquiring the core technology and the majority of the workforce from a competitor. However, with journalists having free time during the holidays, such stories inevitably get dug up.
First, it must be clarified that all the transaction details disclosed so far fall under what PR professionals might call "market speculation" (which often means information unofficially leaked to reporters). NVIDIA and Groq have only publicly stated that NVIDIA obtained a "non-exclusive license" to Groq's technology. In other words, other companies are also free to negotiate licensing deals with Groq. Additionally, Groq confirmed that NVIDIA would hire its founder, president, and other core team members. According to a weekend report by Axios, NVIDIA is actually absorbing 90% of Groq's employees, with both employee and investor shares being cashed out based on a $2 billion valuation.
Anyone with basic judgment would likely conclude this is equivalent to NVIDIA acquiring Groq's core assets. But why get bogged down in semantic details? More notably, The Wall Street Journal reported today that Groq's remaining assets might attract multiple bidders.
Such "pseudo-acquisitions" have become an unspoken rule in the AI industry, aimed at sidestepping regulatory scrutiny.
Indeed, several companies in the AI field have completed deals that are "licensing in name, acquisitions in substance," including Google's acquisition of Character.ai, Amazon's acquisition of Adept, and Microsoft's acquisition of Inflection. This publication's report last Wednesday on the Groq deal also mentioned that NVIDIA employed a similar model in its previous acquisition of Enfabrica.
The fundamental purpose of structuring these deals to avoid the formal label of an "acquisition" is to evade regulatory review. Although reports suggest regulators have begun examining one or two of these transactions, so far, this strategy has successfully avoided substantive regulatory intervention. The NVIDIA-Groq deal is the largest of its kind. Had the antitrust regulators from the previous administration still been fully operational, this transaction would certainly have attracted significant attention.
SoftBank and NVIDIA also share a recent, highly profitable short-term investment—in Intel stock.
Both companies announced investments in the struggling chip giant late in the summer. NVIDIA's $5 billion investment was only finalized last Friday (having awaited regulatory approval!), while SoftBank completed its $2 billion investment back in September.
Since the announcements of these investments, Intel's stock price has surged over 50%. Specifically, SoftBank purchased 86.9 million shares at $23 per share, and NVIDIA acquired 214.8 million shares at $23.28 per share. With Intel's closing price today at $36.68, this translates to an unrealized gain of approximately $1.2 billion for SoftBank and a staggering $2.9 billion for NVIDIA—a remarkably substantial return!
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