Nvidia Corp (NASDAQ:NVDA) is considering acquiring the OctoAI startup for $165 million to boost its software and cloud computing services.

According to the Information, which cites shareholders' messages, the startup sells software designed to enhance the efficiency of artificial intelligence models.

OctoAI raised $132 million from investors, including Tiger Global, which was valued at $900 million in 2021.

Also Read: BlackRock, Microsoft, Others Team Up For $30B Artificial Intelligence Fund: Help US Fuel 'AI Innovation And Economic Growth'

In March, OctoAI tapped Nvidia to usher in optimized generative AI models for enterprises.

OctoAI integrated NVIDIA NIM (which refers to inference microservices for accelerating the deployment of foundation models on any cloud or data center) into its generative AI platform to serve customer use cases, including language and image generation. Additionally, developers could experiment with inference-optimized models.

Nvidia is up 163% in the last 12 months, as its Graphics Processing Units (GPUs) remain indispensable to Big Techs like Microsoft Corp (NASDAQ:MSFT), Amazon.Com Inc (NASDAQ:AMZN), Google parent Alphabet Inc's (NASDAQ:GOOG) (NASDAQ:GOOGL) dream of accomplishing its AI ambitions.

Nvidia chief Jensen Huang voiced his conviction in the AI frenzy, expecting hyper-scale customers to produce $5 in rental revenue for every $1 spent on Nvidia's infrastructure.

Some significant hyper-scaler collaborations by Nvidia include Amazon and Oracle Corp (NYSE:ORCL), which BofA Securities analyst Justin Post expects will unlock significant cloud opportunities.

Price Action: NVDA stock is up 1.02% to $116.77 at the last check on Wednesday.

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