(Bloomberg) — Amazon.com founder Jeff Bezos joins Samsung in a $700 million bet on TenTrent, buying an AI chip startup with ambitions to take on Nvidia Inc. for about $2.6 billion. Evaluated.
Founder and semiconductor pioneer Jim Keller said in an interview that TenStorage wants to develop chips to break NVIDIA’s stranglehold on the AI business, and has partnered with South Korea’s AFW Partners. The company reportedly raised funds in a funding round led by Samsung Securities. Bezos Expeditions joined LG Electronics and Fidelity in the financing, betting on Keller’s pedigree and the burgeoning opportunities in artificial intelligence technology.
The funding will be used to build Tenstorrent’s engineering team, invest in its global supply chain, and build a large-scale artificial intelligence training server to help demonstrate the technology.
As the quest for greater AI power and cost efficiencies grows, small and medium-sized companies are emerging to take market share from power-hungry Nvidia chips. Tenstorrent, an Nvidia neighbor in Santa Clara, California, is one of many engineering solutions currently aimed at making AI development more affordable. It’s built on open source, commonplace technology, avoiding complex and expensive components like high-bandwidth memory in favor of Nvidia.
“You can’t beat Nvidia when it comes to HBM, because they buy the most HBM and have a cost advantage,” Keller said. “But we can never lower the price because HBM is built into the product and into the socket.”
Nvidia offers developers a full suite of unique technologies that cover everything from chips to interconnects to data center layouts, and all parts are designed to work together so you can I promise it will work well. Companies like rivals Advanced Micro Devices Inc. and Tenstorrent are instead seeking greater interoperability with other technology providers, either through common industry standards or by publishing their designs for use by other technology providers. That’s what I’m aiming for.
Tenstorrent is also a proponent of another type of logical processor based on an open standard called RISC-V, which poses a challenge for Arm Holdings Plc. Keller, known for his silicon design work at Apple, Tesla and AMD, is an advocate.
“Before, I was using proprietary technology, and it was really difficult,” Keller said. “Open source helps build a bigger platform. It attracts engineers. And yes, this is a bit of a passion project.”
Like RISC-V and Japanese partner Rapidus Corp., Tenstorrent still has a lot to prove. To date, the startup has signed contracts with customers totaling nearly $150 million, which pales in comparison to Nvidia’s tens of billions of dollars in data center revenue each quarter.
Keller said Tenstorrent plans to release new AI processors every two years. Meanwhile, Nvidia intends to update its AI chip products on an annual basis, company boss Jensen Huang said in June.
Managing director Bonil Koo said AFW Partners made the investment after hearing positive feedback from Korean companies that already work with Tenstorrent, such as LG.
Tenstorrent’s first chip will be manufactured by GlobalFoundries Inc., and subsequent versions will be manufactured by Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co., the company said. Design for cutting-edge 2-nanometer manufacturing has also begun. TSMC and Samsung plan to start mass production at that scale next year, and Tenstorrent is in talks with them and Japan’s Rapidus, which is aiming for 2nm output in 2027.
Other investors in this funding round include Export Development Canada, Ontario Health Care Pension Plan, Hyundai Motor Group, and Baillie Gifford.
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