Key Takeaways
- The chip giant is negotiating to back AI data provider Mercor at a $20 billion price tag, representing a 100% increase from its last funding
- The startup reported $614 million in gross revenues during H1 2026, with its annualized revenue rate surpassing $2 billion by mid-year
- The semiconductor leader currently spends millions with Mercor for expert training data powering its Nemotron open-source AI platform
- General Catalyst is spearheading this new financing; Mercor’s client roster includes OpenAI, Google DeepMind, and Anthropic
- Analysts maintain a Strong Buy recommendation on NVDA shares with a consensus target of $306.13, suggesting more than 40% potential gain
The semiconductor powerhouse is pursuing an investment opportunity in Mercor, a firm specializing in AI data labeling and talent matching, at approximately $20 billion. This represents a significant jump from the $10 billion valuation the company achieved in its Series C financing.
General Catalyst has taken the lead on this upcoming funding round. The transaction remains under negotiation and has not been finalized.
Three San Francisco-based college dropoutsāBrendan Foody, Adarsh Hiremath, and Surya Midhaālaunched Mercor in 2023. The platform bridges the gap between domain specialists in areas such as legal, financial, and scientific sectors with AI research laboratories seeking to enhance model training.
The graphics chip manufacturer already ranks among Mercor’s largest clients. During the previous quarter, it channeled millions into the startup for premium training datasets.
These datasets power Nvidia’s Nemotron suite of open-source AI models, positioned as alternatives to proprietary platforms developed by entities like OpenAI and Google DeepMind.
The partnership has deepened considerably, with multiple Mercor team members now dedicating nearly their entire schedules to projects for the chip maker.
Explosive Revenue Trajectory at Mercor
The startup has demonstrated remarkable expansion. During the first six months of 2026 alone, it recorded $614 million in gross revenues. By June’s conclusion, its annualized gross revenue run rate had exceeded $2 billion, marking a year-over-year increase of more than 100%.
Proprietary AI developers continue to represent the bulk of its revenue stream. Major clients include OpenAI, Google DeepMind, and Anthropic. The chip manufacturer has also engaged other data labeling providers, such as Turing and Scale AI.
Strategic Investment Expansion by Nvidia
This prospective transaction aligns with the company’s evolving investment approach. The organization has shifted beyond its traditional chip manufacturing focus, actively deploying capital throughout the AI ecosystemāspanning infrastructure initiatives, software solutions, and data providers.
During a single fiscal quarter, the company allocated $18.6 billion toward private enterprises and infrastructure vehicles. This represents substantial venture activity for a semiconductor manufacturer.
Supporting Mercor would provide the chip leader with enhanced control over the data infrastructure fueling its proprietary AI development efforts. This move also ensures continued access to premium expert-labeled datasets amid escalating demand for specialized training information.
NVDA shares declined 0.99% at the time of this report.
Market analysts continue to express strong confidence in the stock. With 34 Buy recommendations and a single Hold rating issued over the last three months, it holds a Strong Buy consensus. The average price objective stands at $306.13, indicating potential appreciation exceeding 40% from present trading levels.
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