TORONTO — Nvidia’s deal to acquire Canadian AI startup CentML could exceed US$400 million in value, The Logic has learned.

The Santa Clara, Calif.-based chip giant, the world’s most valuable company by market capitalization, beat out other interested bidders for the Toronto-based firm, according to two people with knowledge of the deal.

CentML’s sale is worth well over US$300 million to its investors and shareholders, one source said. But the total value of the deal could rise to more than US$400 million, factoring in adjustments including earn-outs conditional on the acquisition meeting undisclosed performance targets, another source said. The Logic agreed not to name the sources as they were not authorized to speak publicly about the matter. 

Nvidia did not respond to a request for comment.

The Logic was first to report last week that Nvidia had acquired CentML, which made software that operated between users’ AI models and the chips powering them, tapping under-used hardware capacity and employing other tricks to make the systems run better. The startup sold subscriptions to its software, and also formed revenue-sharing agreements with cloud providers that bundled its technology into the services they sold to clients. 

The deal is likely to yield significant returns for early investors in CentML. The company had raised a total of US$30.9 million in venture capital, according to PitchBook data. Investors will receive cash for their shares, one source said.

Radical Ventures incubated CentML and provided its US$3.5 million pre-seed round in June 2022, at a post-money valuation of just under US$13 million, according to The Logic’s analysis of corporate filings. 

The startup emerged from stealth in June 2023. That October, CentML raised a US$27-million seed round led by Google’s Gradient Ventures, at a post-money valuation of just over US$60 million. Other backers included Nvidia itself, as well as Deloitte Ventures, and the venture arm of Thomson Reuters.

As part of the deal, former CentML CEO Gennady Pekhimenko became Nvidia’s senior director for AI software. The startup’s other three co-founders took manager positions at Nvidia last month, according to their LinkedIn profiles. The chip giant also brought on at least 18 other technical staff from CentML in June, data from the professional network site shows.

Nvidia has become one of the world’s most valuable companies based on demand for its graphics processing units (GPUs), which developers and cloud providers use to train and run AI models. The company is also building out its own cloud service, and has invested in newer players in the processing-power market.

Over the last year-and-a-half, Nvidia has acquired several startups developing technology to help businesses make more efficient use of the hardware that runs their AI models and applications, including Deci, OctoAI and Run:ai.