Reflection AI targets $25B valuation in Nvidia-backed open-source AI push
What's the deal? Reflection AI, a two-year-old startup backed by Nvidia, is in talks to raise $2.5 billion at a $25 billion pre-money valuation — more than three times the $8 billion at which Nvidia invested roughly $800 million in a previous round.
JPMorgan ChaseDealroom has a profile for this one. Try Dealroom → is considering joining through its Security and Resiliency Initiative, a programme launched in December 2025 to back US companies tied to national security and critical infrastructure.
Founded in 2024 by former Google DeepMind researchers Misha LaskinDealroom has a profile for this one. Try Dealroom → and Ioannis AntonoglouDealroom has a profile for this one. Try Dealroom →, Reflection is building freely available, open-source AI models designed to be used and adapted by businesses, universities, and governments.
It is also part of Nvidia's Nemotron Coalition, a consortium of startups — including Cursor and Thinking Machines Lab — working to build a US-led open-source AI ecosystem.
Why now? The raise is directly tied to geopolitics. Chinese companies like DeepSeek have been releasing powerful open-source models that other countries can adopt — along with the Chinese infrastructure that comes with them. Investors have taken to calling Reflection the "DeepSeek of the West," and the TrumpDealroom has a profile for this one. Try Dealroom → administration is actively promoting it as a tool of AI diplomacy.
Reflection recently signed a multi-billion-dollar deal with South Korean conglomerate Shinsegae GroupDealroom has a profile for this one. Try Dealroom → to build a 250-megawatt data centre running Korean-language AI models on thousands of Nvidia chips. The US Commerce DepartmentDealroom has a profile for this one. Try Dealroom → is expected to use the deal as a blueprint for a broader AI export programme. More sovereign AI deals are in the pipeline.
What could go wrong? Reflection has yet to generate meaningful revenue, and its valuation has risen from $8 billion to $25 billion in a matter of months — without a released model to show for it. The open-source model is also a commercially precarious one: giving away technology freely makes monetisation dependent on services, infrastructure deals, and government contracts rather than software sales.
The company's political ties are also a double-edged sword. Reflection is backed by 1789 CapitalDealroom has a profile for this one. Try Dealroom →, where Donald Trump Jr.Dealroom has a profile for this one. Try Dealroom → is a partner, and Shinsegae's chairman has a relationship with Trump Jr. — connections that could complicate future deals with non-aligned governments or under a different administration.
The signal: Open-source AI has become a geopolitical battleground. The US has largely ceded this space to Chinese labs, and Reflection — with Nvidia's backing and Washington's blessing — is now being positioned as the answer. The deeper implication: AI infrastructure is becoming a new form of foreign policy, with chips, models, and data centres replacing the tools of traditional economic diplomacy.
Sources:
Tech Funding News
Reuters
The Wall Street Journal
The Wall Street Journal
StreetInsider
Image credit:
Sequoia Capital
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