Reflection AI, a year-old American start-up developing open-source artificial intelligence models, has raised $2 billion in new funding led by Nvidia.
The deal values Reflection AI at $8 billion including the new money, significantly more than the approximately $545 million valuation in March, reports The New York Times.
Nvidia invested $800 million and had several engineers work with Reflection AI to optimise its most recent generation of AI chips. Other participants in the round included existing backers Lightspeed Venture Partners and Sequoia Capital, with new investors including DST, former Google chief executive Eric Schmidt and 1789 Capital.
Companies that build AI foundation models have raised $71.9 billion worldwide so far this year, according to PitchBook, compared to $34.9 billion last year.
Reflection AI raised the funding seven months after securing $130 million in March. The company is positioning itself as a Western equivalent to DeepSeek, the Chinese start-up whose AI model rivals competing Western ones.
Misha Laskin, Reflection AI’s co-founder and chief executive, said existing Western open-source AI models are underperforming DeepSeek and other Chinese rivals, which may lead to greater adoption of Chinese-created models.
“There’s a DeepSeek-shaped hole in the U.S., which I think is what makes it critical for a lab like ours to exist,” Laskin said.
Laskin conceded that Reflection AI would need more money to keep competing, especially as rivals are also rushing to raise funds. OpenAI secured an investment commitment of up to $100 billion last month from Nvidia.
“I anticipate us to be potentially a bigger company than the hyperscalers of today,” he said.
