Poolside's $2bn AI ambitions hit roadblocks as funding stalls and partnerships collapse

AI start-up Poolside is racing to revive investor confidence after its $2bn funding round stalled. Founded in 2023 by Jason Warner and Eiso Kant, the company initially focused on coding automation but has since expanded into large-scale data centre projects. Recent setbacks, including a failed partnership and paused talks with major cloud providers, have left its ambitious plans in doubt. Poolside raised $500mn in early 2024 to build AI tools for software development. But its strategy soon shifted toward infrastructure, with plans for a 2-gigawatt Texas data centre called Horizon. The site was designed to host tens of thousands of Nvidia's latest AI chips, powered by 2.5 GW of on-site solar and wind energy.

Talks with Google to secure 400 megawatts of capacity for Horizon have since fizzled out. A key partnership with CoreWeave also collapsed after Poolside missed deadlines for activating its first cluster of chips. These delays contributed to stalled funding discussions, as investors questioned whether the start-up could train advanced AI models at scale.

In response, Poolside has split into two separate companies: one handling infrastructure (PIC) and another focused on model development. The move aims to attract different types of investors. To further boost confidence, the firm plans to release an API by the end of April, demonstrating progress to potential backers like Nvidia and venture capital firms.

The company now sees a new opportunity in government contracts. Following the Pentagon's blacklisting of rival Anthropic, Poolside is positioning its technology for defence and public sector buyers. Poolside's next steps depend on securing fresh funding and proving its technical capabilities. The planned API release and restructuring may help restart talks with Nvidia and other investors. Meanwhile, its Texas data centre project remains on hold until new partnerships or commitments emerge.