This Company Is Aiming For America's DeepSeek, And It Just Got $2 Billion in Funding Led By NVIDIA

On October 9, U.S. AI startup Reflection AI announced the completion of a $2 billion funding round, led by NVIDIA, which contributed $800 million. The round values the one-year-old company at $8 billion. Reflection AI is betting on open-source AI models, aiming to create an American counterpart to DeepSeek.

Reflection AI's co-founder and CEO, Misha Laskin, said there is a "DeepSeek-shaped hole" in the U.S., arguing that existing Western open-source AI models are losing ground to competitors like DeepSeek. The company believes that the U.S. needs an open-source model developer capable of rivaling top closed-source models to maintain its global technological edge.

This latest round comes just seven months after the company's $130 million Series A in March, when it was valued at roughly $545 million—a massive leap in valuation. Other investors in the round include Lightspeed Venture Partners, Sequoia Capital, DST Global, former Google CEO Eric Schmidt, and 1789 Capital, a fund co-founded by Donald Trump Jr.

The deal underscores investors' ongoing enthusiasm for AI. According to PitchBook, foundational AI model companies have raised $71.9 billion globally so far this year, more than double last year's $34.9 billion.

NVIDIA's Big Bet on Open-Source AI

NVIDIA played a pivotal role in this round—not only by becoming the largest investor but also by sending engineers to work with Reflection AI on optimizing its next-generation AI chips. According to sources familiar with the matter, the two companies have established deep technical collaboration.

The move signals that NVIDIA is hedging its bets across both closed-source and open-source AI ecosystems. Just last month, NVIDIA reportedly pledged up to $100 billion to OpenAI. By diversifying its investments, NVIDIA ensures that it remains a dominant force regardless of how the AI landscape evolves.

NVIDIA's backing also gives Reflection AI a technological edge. As the undisputed leader in AI chips, NVIDIA's engineering support helps boost Reflection AI's computational efficiency and model performance.

Open-Source Models Challenge the Closed-Source Giants

Reflection AI's rise reflects a growing ideological and strategic divide within the AI industry. For years, companies like OpenAI and Google have dominated with proprietary, closed-source systems. But the emergence of high-performance, open-source models—like DeepSeek—has started to reshape the competitive landscape.

Laskin likens the current AI race to the Cold War space race, emphasizing that the U.S. must build open-source strength to preserve leadership in AI.

While critics warn that open-source AI could pose security and misuse risks, Reflection AI believes that strong demand from enterprises and governments will ultimately create a sustainable business model.

Developing advanced AI models requires vast computing power, research talent, and capital, and Laskin acknowledged that Reflection AI will need continued funding to stay competitive—especially as rivals aggressively raise their own capital.

According to reports, the company's fundraising talks with investors accelerated rapidly over recent weeks, reflecting intense investor urgency and confidence in the open-source AI race. Laskin remains optimistic about Reflection AI's trajectory - he says he expects smaller AI companies like Reflection AI to become the Amazons and Metas of the future.