OctoAI, a Seattle software startup that sells tools to help build and run generative AI models more efficiently, has been acquired by chip giant Nvidia.
OctoAI’s homepage has a banner with the line: “OctoAI is now NVIDIA.”
A spokesperson for Nvidia declined to comment when contacted by GeekWire.
OctoAI sent emails to customers informing them that it was winding down the commercial availability of its services, effective Oct. 31, according to a post on LinkedIn.
It’s the latest AI-related acquisition for Nvidia, the dominant chipmaker that is riding huge tailwinds from the AI boom, thanks to its widely used GPUs, which are in high demand for training and running AI models. The company has gobbled up at least four other startups this year, including one that is under investigation by the Justice Department.
The Information reported last week that Nvidia was in advanced talks to buy OctoAI for about $165 million, before accounting for debt and other expenses.
A source familiar with the acquisition told GeekWire that the total amount paid by Nvidia could ultimately exceed $250 million including incentives for retaining key members of the OctoAI team.
OctoAI was valued at around $900 million when it raised an $85 million round in 2021, according to The Information — suggesting that the outcome for investors wasn’t massive.
The venture capital market has slowed in the past few years amid higher interest rates, making it more difficult for some startups to raise additional cash to fund their businesses.
AI startups are raising a large chunk of total funding, though some industry insiders expect more M&A activity as companies run out of money and larger corporations look to buy talent and tech.
More recently, regulators have been scrutinizing deals between tech giants and smaller startups that are structured as “reverse acquihires,” which include hiring company founders and licensing technology.
Nvidia’s acquisition was structured as a traditional M&A deal, according to a source with knowledge of the transaction.
OctoAI’s investors include Tiger Global Management; Addition; Madrona Venture Group; and Amplify Partners. The company has more than 100 employees.
It’s not clear what will happen to current OctoAI employees, though one worker wrote on LinkedIn that he and his colleagues are “officially free agents.”
OctoAI CEO and co-founder Luis Ceze said he’ll be joining Nvidia.
“I couldn’t be more excited to join NVIDIA and contribute to expanding efforts in ML compilers and cloud infrastructure for AI,” Ceze wrote on LinkedIn. “I can’t imagine a better place to building AI systems in the world right now than NVIDIA.”
OctoAI raised more than $132 million since 2019, when it spun out of the University of Washington. The company’s founders helped create Apache TVM, an open source “deep learning compiler stack” that started as a research project at the UW’s computer science school.
OctoAI in May released OctoStack, which it described as “the industry’s first complete tech stack to serve generative AI models anywhere.”
The startup was previously known as OctoML, but changed its name earlier this year to reflect an evolution of the company’s offerings. Its original pitch was to help companies deploy machine learning models on various hardware configurations.
OctoAI’s customers and partners include a bevy of hardware and software companies, including giants such as AWS and Google, as well as generative AI companies.
The Seattle startup announced a collaboration with Nvidia earlier this year to integrate Nvidia’s NIM microservices product into its platform.
Matt McIlwain, managing director at Madrona, an early OctoAI investor, said the company’s annual revenue was in the “significant single-digit millions.”
“I think this was a really great strategic alignment with Nvidia,” McIlwain said. He called Nvidia the “perfect partner for OctoAI.”
Ceze is a longtime University of Washington computer science professor and former finalist for CEO of the Year at the GeekWire Awards. He previously started Corensic, a debugging startup that F5 acquired in 2012. His four co-founders include: Jared Roesch, Tianqi Chen, Jason Knight, and Thierry Moreau.
The company’s board of directors includes Ceze; McIlwain; Mike Dauber of Amplify Partners; Carlos Guestrin of Stanford University; and Lip-Bu Tan of Walden International.
OctoAI was ranked No. 30 on the GeekWire 200, our list of top privately held startups across the Pacific Northwest.
Editor’s note: This story was updated with new information about the deal value.
