Tenstorrent, an AI chip startup based in Santa Clara, California, has raised $700 million in a funding round led by South Korea’s AFW Partners and Samsung Securities. The round, which values the company at $2.6 billion, also saw participation from high-profile investors, including Amazon.com Inc. founder Jeff Bezos through Bezos Expeditions, LG Electronics Inc., and Fidelity. The funding will support Tenstorrent’s ambitious plans to challenge NVIDIA Corp.’s dominance in the AI chip market.
Tenstorrent plans to use the funds to expand its engineering team, enhance its global supply chain, and build large AI training servers to showcase its technology. Founder and semiconductor pioneer Jim Keller emphasized the importance of cost efficiency and open-source solutions in the AI chip landscape, stating: “You can’t beat NVIDIA if you use HBM, because NVIDIA buys the most HBM and has a cost advantage.”
Keller, known for his previous silicon design work at Apple Inc., Tesla Inc., and AMD, is leading Tenstorrent’s push to disrupt the market with its open-standard RISC-V processors. He expressed his preference for open-source technology, saying, “Open source helps you build a bigger platform. It attracts engineers. And yes, it’s a little bit of a passion project.”
Tenstorrent’s chips aim to provide a more affordable alternative to NVIDIA’s proprietary, high-bandwidth memory (HBM)-based solutions. By leveraging open-source and widely used technologies, Tenstorrent seeks to achieve greater interoperability with other tech providers. This approach contrasts with NVIDIA’s comprehensive, proprietary ecosystem that integrates chips, interconnects, and data center layouts.
The company plans to release new AI processors every two years, aligning with its strategy to offer cost-effective and scalable solutions. In contrast, NVIDIA aims to refresh its AI chip offerings annually.
AFW Partners managing director Bonil Koo noted that the firm’s investment decision was influenced by positive feedback from Korean companies already collaborating with Tenstorrent, such as LG Electronics. The startup has also secured contracts with customers totaling nearly $150 million, though this figure is modest compared to NVIDIA’s multibillion-dollar data center revenue each quarter.
Tenstorrent’s backers include notable investors such as Export Development Canada, Healthcare of Ontario Pension Plan, Hyundai Motor Group, and Baillie Gifford. The startup’s first chips were manufactured by GlobalFoundries, with future iterations slated for production at Taiwan Semiconductor Manufacturing Co. (TSMC) and Samsung Electronics Co. Tenstorrent is also exploring 2-nanometer fabrication technology in collaboration with TSMC, Samsung, and Japan’s Rapidus Corp., which aims to commence 2nm production by 2027.
With a robust lineup of investors and a focus on innovation through open-source RISC-V processors, Tenstorrent aims to carve out a significant share of the AI chip market. While its current revenue is a fraction of NVIDIA’s, the startup’s commitment to cost-efficient, scalable technology positions it as a formidable competitor in the rapidly evolving AI landscape.
