(Bloomberg) — Amazon.com Inc. founder Jeff Bezos has joined Samsung in a $700 million bet on Tenstorrent, valuing the AI chip startup with ambitions to take on Nvidia Corp. at approximately $2.6 billion.
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Tenstorrent, which hopes to create a chip to try to break Nvidia’s stranglehold on the AI sector, has raised capital in a funding round led by South Korean firm AFW Partners and Samsung Securities, its company said. founder and semiconductor pioneer Jim Keller in an interview. Bezos Expeditions joined LG Electronics Inc. and Fidelity in this financing, betting on Keller’s pedigree and the burgeoning opportunity in artificial intelligence technology.
The money will be used to strengthen Tenstorrent’s engineering team, invest in its global supply chain, and build large AI training servers to help demonstrate its technology.
As the quest for more power and profitability in AI accelerates, small companies are springing up to try to take market share from Nvidia’s power-hungry chips. Tenstorrent, a neighbor of Nvidia in Santa Clara, California, is one of several engineering solutions aimed at providing a more affordable path to AI development. This is based on open source and common technology, avoiding complex and expensive components like the high bandwidth memory favored by Nvidia.
“You can’t beat Nvidia if you use HBM, because Nvidia buys the most HBM and has a cost advantage,” Keller said. “But they will never be able to drive down prices the way HBM is integrated into their products and their outlets.”
Nvidia offers developers a full suite of proprietary technologies, covering everything from chips to interconnects and even data center layout, with the promise that all the pieces will work better because they were designed in concert. Companies like rivals Advanced Micro Devices Inc. and Tenstorrent are instead aiming for greater interoperability with other technology providers, whether through common industry standards or opening their designs to others.
Tenstorrent is also a proponent of an alternative type of logic 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 Inc., Tesla Inc. and AMD, is an advocate.
“In the past, I worked with proprietary technologies and it was really difficult,” Keller said. “Open source helps you build a bigger platform. This attracts engineers. And yes, it’s a bit of a passion project.