Data labeler Mercor's valuation soars to $20 billion Nvidia (NVDA.US) may participate to increase open source AI

The Zhitong Finance App learned that according to reports, Nvidia (NVDA.US) is in talks to invest in the AI data labeling service provider Mercor. This round of financing will bring the valuation of this startup, which has only been established for three years, to 20 billion US dollars. According to the report, existing investor General Catalyst is in talks to lead this round of financing. The proposed financing terms and the size of Nvidia's potential investment are currently unclear.

Nvidia urgently supplements human expert data and bets on the open source Nemotron ecosystem

This potential investment highlights Nvidia's continued expansion in the field of open source AI. The company is advancing the development of its open source Nemotron AI model series to compete with the world's top open source weighting models. On the 11th of this month, Nvidia released the latest big open source model, Nemotron 3.5 Lightning. This is the first open source model released after the company's CEO Hwang In-hoon publicly stated his support for the open source model at the end of last month.

Mercor's past revenue came from closed-source AI model developers such as OpenAI, Google, and Anthropic. However, as Nvidia prioritizes the development of the Nemotron open source model, Mercor's business revenue from Nvidia is growing rapidly. According to reports, last quarter alone, Nvidia paid Mercor tens of millions of dollars to procure high-quality data labeled by experts in the fields of law, finance, and science. To meet growing demand, Mercor has formed a dedicated team to focus on serving Nvidia.

Although Nvidia's investment in manual labeling data continues to increase, it is reported that the company still relies heavily on synthetic data generated by AI when training Nemotron series models. Additionally, Nvidia also collects data generated when developers interact with the Nemotron model through the OpenRouter platform. OpenRouter is a platform that allows developers to access multiple vendor models.

In addition to Mercor, Nvidia also uses data from external data vendors such as Turing and Scale AI, and also has its own internal data operations team. It is worth mentioning that Nvidia has previously participated in Scale AI's 2024 financing round, which valued Scale AI at $14 billion at the time.

Nvidia Ventures accelerates expansion and invests $18.6 billion in a single quarter

The negotiations with Mercor are a microcosm of the full expansion of Nvidia's corporate venture capital activities. Although the company mainly invests in hardware customers and large computing platforms — such as recent investments of $2 billion each in cloud computing operators Coreweave and Nebius, as well as investments in optical component vendors Lumentum and Coherent — its capital allocation in the AI ecosystem is growing at an alarming rate.

Securities documents show that in the last fiscal quarter, Nvidia used US$18.58 billion in cash to purchase unlisted equity securities, compared to only US$649 million in the same period last year. Over the past year, the scale of this type of venture capital increased dramatically. As of the end of the April fiscal quarter, the total amount of unlisted equity securities held by Nvidia reached 42.3 billion US dollars, far higher than the 3.2 billion US dollars in the same period last year.

Although Nvidia did not specifically disclose which private companies are included in its unlisted equity portfolio in its regulatory filings, the company revealed in its annual report submitted in January that it had invested $17.5 billion in private enterprises and infrastructure funds (including AI model developers), and stated that “many of these investments have poor liquidity and cannot be publicly traded.”

Mercor grows rapidly: annualized revenue exceeds $2 billion

Mercor's growth trajectory is also impressive. The AI recruitment and data platform was founded in 2023 by college dropouts Brendan Foody, Adarsh Hiremath, and Surya Midha, and is headquartered in San Francisco. According to reports, Mercor's total annualized revenue in June reached 2 billion US dollars, a year-on-year increase of more than 100%.

Mercor's valuation after completing Series C financing in October 2025 is US$10 billion. If the valuation reaches US$20 billion after this round, it means that the valuation doubles in less than a year. According to PitchBook data, Mercor has raised a total of about 520 million US dollars from well-known investment institutions in Silicon Valley such as Benchmark and Felicis so far.