As reported by Yahoo! Finance, Amazon founder Jeff Bezos teamed up with Samsung in a $700 million investment in Tenstorrent, valuing the AI chip startup at around $2.6 billion.
Tenstorrent, striving to challenge Nvidia's dominance in the AI sector, secured funding from a round led by South Korea's AFW Partners and Samsung Securities, according to founder Jim Keller. Bezos Expeditions, LG Electronics Inc., and Fidelity also participated in the funding, recognizing the potential in artificial intelligence technology.
The capital infusion will be utilized to expand Tenstorrent's engineering team, enhance its global supply chain, and develop large AI training servers to showcase its technological advancements.
Amid the increasing demand for more powerful and cost-effective AI solutions, emerging companies like Tenstorrent are emerging to compete with Nvidia's resource-intensive chips. Located near Nvidia in Santa Clara, California, Tenstorrent is among the companies crafting solutions that offer a more accessible path to AI development by leveraging open-source and widely used technology, steering clear of costly components like Nvidia's high-bandwidth memory.
"Using HBM puts you at a disadvantage against Nvidia since they have the cost edge due to buying the most HBM," Keller explained. "However, they won't be able to lower prices as much since HBM is deeply integrated into their products and platforms."
While Nvidia provides an array of proprietary technologies to developers, covering everything from chips to interconnects and data center configurations, promising seamless integration, other players like Advanced Micro Devices Inc. and Tenstorrent are focusing on enhanced compatibility with various tech providers, either through industry standards or sharing their designs for broader adoption.
Tenstorrent champions an alternative logic processor based on the open standard RISC-V, challenging Arm Holdings Plc's dominance. Keller, renowned for his work on silicon design at Apple Inc., Tesla Inc., and AMD, strongly supports this approach.
"Working with proprietary technology was challenging in the past," Keller shared. "Open source allows for broader platform development, draws in engineers, and serves as a passion project."
Despite Tenstorrent's endorsement of RISC-V and its partnerships, like with Rapidus Corp. in Japan, the company still faces significant hurdles. Presently, Tenstorrent has secured contracts worth nearly $150 million, a fraction of Nvidia's colossal data center revenue, which reaches into the billions each quarter.
Keller disclosed that Tenstorrent plans to introduce a new AI processor every two years, contrasting Nvidia's strategy of annual AI chip updates as outlined by its CEO, Jensen Huang.
AFW Partners' decision to invest was influenced by positive reviews from Korean companies engaged with Tenstorrent, such as LG, said managing director Bonil Koo.
Tenstorrent's debut chips were manufactured by GlobalFoundries Inc., with future versions set to be crafted by Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co., according to the company. The company has initiated the design process for state-of-the-art 2-nanometer production. TSMC and Samsung are expected to kick off mass production at this capacity next year, with ongoing discussions between Tenstorrent and both companies as well as with Japan's Rapidus, targeting a 2nm yield by 2027.
The latest round of funding also saw participation from Export Development Canada, Healthcare of Ontario Pension Plan, Hyundai Motor Group, and Baillie Gifford.
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