Sam Altman, CEO of Microsoft-backed OpenAI (MSFT, Financial data), continues a $150 million fundraising round for Rain AI, a semiconductor startup aiming to compete with Nvidia (NVDA, Financial data), reports the New York Post, citing a source close to the matter.
Rain AI is valued at $600 million in the fundraising, which follows its initial fundraising of $25 million in 2022, when Altman was a major investor.
Next month will likely mark the second round of investment. Highlighting Rain AI’s focus on energy-efficient and high-performance semiconductors, a source said Altman had apparently pitched the potential to OpenAI investors.
Formed as a competitor in the artificial intelligence hardware market, Rain AI recently hired former Apple executive Jean-Didier Allegrucci to oversee its hardware engineering initiatives. With an estimated 85% share, the company claims its chips are more energy efficient than those of Nvidia, which dominates the artificial intelligence chip industry.
Altman’s efforts coincide with Nvidia’s strengthening ties with Elon Musk, who intends to purchase 100,000 Nvidia processors for xAI and other AI projects. Given these advances, Nvidia is expected to continue supplying processors to OpenAI.
Rain AI is one of the legitimate players at the table when it comes to the future of AI and chips, said Dan Ives, an analyst at Wedbush. There is a lot of buzz around everything Rain AI is doing and these are the early days of the AI revolution. There will be many players, not just the godfather of AI, Jensen Huang and Nvidia.
This article first appeared on GuruFocus.