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Tenstorrent, a chip startup led by renowned semiconductor engineer Jim Keller, has raised over $693 million in its Series D funding round, achieving a $2 billion pre-money valuation. This marks a major milestone for the company, which aims to challenge semiconductor giant Nvidia in the rapidly growing AI chip market.
The funding round was led by Samsung Securities and AFW Partners, with other notable investors including Jeff Bezos’ Bezos Expeditions, Fidelity Management & Research, and LG Electronics. The other investors include Export Development Canada, Healthcare of Ontario Pension Plan, Hyundai Motor Group, Baillie Gifford, and several others.
Tenstorrent, founded in 2016 and based in Santa Clara, California, has now raised over $1 billion in total funding. Jim Keller, one of the most respected figures in semiconductor engineering, joined the company in 2021 as President and Chief Technology Officer (CTO), before being appointed CEO in early 2023. Keller has a very rich background; he worked at companies like Intel, Tesla, Apple, and AMD, where he played a key role in the development of the A4 and A5 processors used in early iPhones and led the design of AMD’s K8 microarchitecture.
Strategic investment and expansion plans
The new funds will be channeled to further solidify Tenstorrent’s position in the AI chip industry. The company plans to build out open-source AI software stacks, expand its global development and design centers, and create systems and cloud infrastructures for AI developers. Tenstorrent aims to provide AI chip solutions that are efficient and scalable, with a focus on supporting increasing demand for AI and machine learning workloads.
Besides the work on AI chips, the company is looking to expand its engineering workforce to support the growing demand for cutting-edge AI hardware. This move aligns with Tenstorrent’s mission to become a leading player in the AI semiconductor space, an industry currently dominated by Nvidia. The boom in AI technologies, such as large language models (LLMs), has placed the AI chip industry under rapid growth, with Tenstorrent well positioned to take advantage of that growing demand.
Competitive landscape in AI semiconductor funding
Tenstorrent is one of the AI chip startups that have raised considerable amounts in recent months. In October, Lightmatter, a startup that uses light-based technology for AI chip interconnectivity, secured $400 million in a Series D funding round, bringing its valuation to $4.4 billion. Other notable AI chip companies include:
- Black Semiconductor, which raised nearly $275 million from the German government in July.
- Celestial AI, an optical interconnectivity startup, which raised $175 million in a Series C funding round in March.
- Etched.ai, which secured $120 million in funding in June.
- Hailo, an Israel-based AI chipmaker, raised $120 million in an extension of its Series C round in April.
It seems that investment in AI hardware is going to be a strong trend because there is a strong need for AI processors. Recent investments for Recogni, Halo Industries, and DreamBig Semiconductor have also seen significant funds raised in the last year. These funds are towards various aspects of the AI hardware and semiconductor
Tenstorrent’s vision for the future of AI hardware
Tenstorrent’s founder and CEO, Jim Keller, believes his company is one of the contenders in the AI hardware sector. He has further explained that Tenstorrent AI chips are designed for performance, efficiency, and scalability. According to Keller, these aspects make it possible for the company to stand out from the AI chip industry dominated by Nvidia A100 and H100 chips at present. Tenstorrent’s chips are expected to support a wide range of machine learning tasks, from natural language processing (NLP) to computer vision.
Noteworthy also is the company’s approach to developing AI software as open source. Tenstorrent offers developers the resources they need to build, test, and optimize AI models on the hardware to foster a vibrant ecosystem around the company’s chips. That could attract developers from startups to large enterprises in search of efficient AI hardware solutions.
The Race to Compete with Nvidia
As the demand for AI chips soars, Nvidia continues to dominate the AI hardware market with its GPU-based architecture. However, with increasing interest in alternative architectures and the rise of AI-focused startups, competition is intensifying. Companies like Tenstorrent are working to provide innovative alternatives that could offer better performance or lower costs for specific AI workloads.
Tenstorrent’s success in attracting tier-one investors and raising major funding underscores growing investor interest in AI hardware. The company will become a threat to Nvidia as it scales its product lines and expands across geographies as AI continues to spread into every industry on the planet.
A Bigger Trend in AI Semiconductor Investment
Funding of Tenstorrent is also part of the broader trend seen in rising investment in AI semiconductor startups. Companies rush to create chips that handle the kind of massive computing power that modern AI applications require. With more usage of machine learning models for almost everything ranging from autonomous cars to health services, the demands for better and more potent hardware solutions have gone up.
The demand for ASICs or FPGAs will rise alongside increasing complexity in AI models. While Nvidia, AMD, and Intel have firmly established themselves in this industry, new companies such as Tenstorrent are attempting to make their place as an innovative alternative with options specific to AI workloads.
