Nvidia Plans Up to $1 Billion Follow-On Investment in AI Coding Startup Poolside

Nvidia is preparing to invest up to $1 billion in Poolside as part of the AI coding startup’s $2 billion funding round, marking the chip maker’s second major investment in the company within a year. The initial contribution will be approximately $500 million, with the potential to reach $1 billion depending on whether Poolside successfully completes its fundraising goals.

Poolside is raising the new capital at a $12 billion pre-money valuation, which would quadruple its $3 billion valuation from October 2024 when the company raised a $500 million Series B led by Bain Capital Ventures with participation from Nvidia, eBay, and other investors. The French startup has already secured over half of the target amount, with existing investors committing approximately $700 million and hedge fund Magnetar negotiating to participate.

Strategic Infrastructure Partnership

A portion of Poolside’s new funding will directly support purchases of Nvidia’s GB300 chips, which are critical for training and deploying the startup’s AI models. The capital commitment strengthens an already tight integration between the two companies’ infrastructures.

Poolside has also partnered with cloud provider CoreWeave to develop Horizon, a large-scale data center project in West Texas designed to draw approximately 2 gigawatts of power. The facility will house Nvidia hardware and support Poolside’s expanding computational requirements as the company scales its foundation models.

Competing in AI-Powered Development

Poolside builds proprietary foundation models trained specifically for software development, positioning itself in a crowded market that includes GitHub Copilot, Cursor, and other AI code generators. The company’s flagship model, Malibu, handles deep reasoning through conversational chat for complex engineering tasks, while Point provides real-time code completion within development environments.

Founded in July 2023 by Jason Warner, former CTO at GitHub, and Eiso Kant, who previously launched the AI company Source{d}, Poolside relocated its headquarters from the United States to Paris in August 2024. The startup uses Reinforcement Learning via Code Execution Feedback (RLCEF), a proprietary training method that teaches models to write functional code by exposing them to over 500,000 open-source repositories and providing feedback based on compilation, testing, and security outcomes.

Poolside has raised $626 million in total funding to date, including a $26 million seed round and a $100 million follow-on before its Series B. The company announced a strategic partnership with Amazon Web Services in December 2024 to deploy its models on Amazon Bedrock and EC2, allowing enterprises to run Poolside’s systems within AWS environments.

Nvidia’s Expanding Investment Strategy

The potential $1 billion investment represents one of Nvidia’s largest bets on an AI application company and reflects the chip maker’s strategy of backing startups that drive demand for its high-performance computing infrastructure. Nvidia has made similar strategic investments across the AI ecosystem, including recent participation in funding rounds for companies building AI agents for business automation and other AI software development tools.

The coding automation market has attracted significant venture capital as companies race to build AI systems capable of handling increasingly complex development tasks. While Poolside has yet to disclose revenue figures or enterprise customer counts, the company’s ability to attract follow-on investment at a substantial valuation increase suggests strong traction among its target market of businesses seeking to accelerate software development cycles.