Nvidia-backed AI start-up Reflection nears deal for $5.5bn valuation - FT

Nvidia-backed AI start-up Reflection nears deal for $5.5bn valuation - FT

Nvidia-backed AI startup Reflection is nearing a deal that could value the company at $5.5 billion, according to the Financial Times. This significant milestone follows a series of strategic partnerships and advancements in the AI semiconductor market.

The deal, which is expected to be finalized soon, comes at a critical juncture for the AI industry, where companies are increasingly focusing on proprietary silicon solutions. The partnership between Broadcom and OpenAI, valued at $10 billion, has already disrupted the market by signaling a shift towards custom AI chips .

Reflection's potential valuation highlights the growing demand for specialized AI hardware. The company's focus on developing high-performance AI chips tailored to specific workloads aligns with the broader industry trend of proprietary silicon solutions. This approach not only reduces latency and costs but also insulates companies from supply chain bottlenecks .

Nvidia's dominance in the AI chip market is being challenged by competitors like Broadcom, which has secured deals with major players such as OpenAI. This competition is driving innovation and pushing companies to invest in custom chip solutions. Nvidia's CEO, Jensen Huang, is actively seeking approval from the Trump administration to export its latest AI chip, Blackwell, to China, a move that underscores the strategic importance of these markets .

The AI semiconductor sector is undergoing a seismic shift, with production slated for 2026. The partnership between Broadcom and OpenAI is more than a one-off deal—it’s a harbinger of a new era in AI semiconductors. As companies prioritize proprietary silicon to secure competitive advantages, Broadcom’s ability to deliver custom, high-performance solutions will likely accelerate its market share gains. While NVIDIA and AMD remain formidable, the industry is witnessing a structural shift .

References:
Broadcom shares rally on new AI deal, CEO's assurance [https://www.reuters.com/business/broadcom-shares-rally-new-ai-deal-ceos-assurance-2025-09-05/]
Nvidia CEO Jensen Huang makes all-out efforts to expand AI chip sales in China [https://www.mk.co.kr/en/world/11415382]