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Jeff Bezos, the founder of Amazon.com Inc., backed Tenstorrent with $700 million, estimating the AI chip startup’s potential to challenge Nvidia Corp. to be worth roughly $2.6 billion.
In an interview, creator and semiconductor pioneer Jim Keller stated that Tenstorrent, which aims to develop a chip to attempt to challenge Nvidia’s monopoly on the AI market, raised money in a funding round headed by Samsung Securities and South Korea’s AFW Partners. In that funding, Bezos Expeditions joined LG Electronics Inc. and Fidelity, placing a wager on Keller’s background and the rapidly expanding field of artificial intelligence technology.
The funds will be utilized to expand Tenstorrent’s engineering staff, make investments in its international supply chain, and construct sizable AI training servers to aid in technological demonstration.
Smaller businesses are emerging in an attempt to capture market share from Nvidia’s power-hungry chips as the race for more AI power and cost efficiency intensifies. Tenstorrent, a neighbor of Nvidia located in Santa Clara, California, is one of several engineering solutions that are currently being offered with the goal of providing a more cost-effective route to AI development. It is based on open-source and widely used technology rather than expensive and complicated parts like the high-bandwidth memory that Nvidia prefers.
“If you use HBM, you can’t beat Nvidia because they have a cost advantage and purchase the most HBM,” Keller stated. “However, they will never be able to lower the price because HBM is ingrained in their sockets and products.”
With the assurance that every component will function better due to its coordinated design, Nvidia provides developers with a comprehensive portfolio of patented technology, including everything from chips to interconnects and even data center topologies. Tenstorrent and rival Advanced Micro Devices Inc., for example, are working toward increased interoperability with other technology suppliers, either by sharing industry standards or making their designs publicly available.
See also: AMD and Nvidia Face Off in the Battle to Rule AI
Tenstorrent is also an advocate of RISC-V, an open standard-based alternative logic processor type that presents a threat to Arm Holdings Plc. Advocate Keller is well-known for his work designing silicon for AMD, Tesla Inc., and Apple Inc.
“I used to work with proprietary technology, and it was really difficult,” Keller remarked. “Building a larger platform is made easier with open source. Engineers are drawn to it. Furthermore, it is kind of a passion project.
Like its Japanese partner Rapidus Corp. and RISC-V, Tenstorrent has a lot of work ahead of it. The fledgling business has so far inked contracts with clients for about $150 million, but that is little compared to Nvidia’s quarterly datacenter revenue of tens of billions of dollars.
Tenstorrent President and CTO Talks on Bloomberg (Podcast)
According to Keller, Tenstorrent intends to introduce a new AI processor every two years. In contrast, Nvidia’s CEO, Jensen Huang, stated in June that the company plans to update its AI chip lineup annually.
According to managing director Bonil Koo, AFW Partners made an investment after receiving encouraging feedback from Korean businesses that were already working with Tenstorrent, such LG.
According to the business, Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. will produce the upcoming versions of Tenstorrent’s chips, which were initially produced by GlobalFoundries Inc. It has also started designing for state-of-the-art 2-nanometer fabrication. Tenstorrent is in talks with Japan’s Rapidus, which plans to produce 2nm in 2027, and TSMC and Samsung, which will start mass manufacturing at that size next year.
Baillie Gifford, Hyundai Motor Group, Healthcare of Ontario Pension Plan, and Export Development Canada are among the other participants in this investment round.
