AI chip startup Tenstorrent has successfully closed a $700 million Series D funding round, boosting its valuation to $2.6 billion. This funding round, led by AFW Partners and Samsung Securities, has garnered support from high-profile investors, including Amazon founder Jeff Bezos through his family office Bezos Expeditions, as well as LG Electronics, Hyundai Motor Group, Fidelity, and XTX Markets.
Tenstorrent, headquartered in Santa Clara, California, plans to use the funds to expand its engineering team, strengthen its global supply chain, and build AI training servers to demonstrate its innovative technology. The company is developing chips that promise more cost-effective and energy-efficient solutions for AI development, distinguishing itself from dominant player Nvidia by avoiding the expensive high-bandwidth memory (HBM) Nvidia relies on.
CEO Jim Keller explained, “You can't beat Nvidia if you use HBM. Nvidia buys the most HBM and has a cost advantage, but they'll never bring the price down the way HBM is built into their products and sockets.”
Tenstorrent is positioning itself as a challenger to Nvidia's market dominance with its open-standard approach, focusing on interoperability with other tech providers. Unlike Nvidia's proprietary ecosystem, Tenstorrent advocates for the RISC-V processor architecture, which Keller believes will attract engineers and foster innovation.
The company has already secured nearly $150 million in contracts, signaling strong market potential. While Nvidia generates billions in quarterly datacenter revenue, Tenstorrent's revenue is modest but promising as it continues to attract attention from investors and tech industry leaders.
With the funding, Tenstorrent will also expand its development and design centers globally, build AI development systems and cloud infrastructure, and continue to advance its open-source AI software stack. Keith Witek, Tenstorrent's Chief Operating Officer, stated, “We're thrilled to have so many investors who believe in our vision. This funding allows us to further our AI initiatives and expand our impact on the market.”
Tenstorrent's chips are built on its Tensix core, and the company is now focusing on producing future AI chips using leading-edge manufacturing technologies from GlobalFoundries, TSMC, and Samsung. It is also exploring 2nm chip designs, in alignment with TSMC, Samsung, and Japan's Rapidus Corp., which aims for 2nm production by 2027.
As Tenstorrent scales its operations, it faces the challenge of competing against Nvidia's entrenched position in the AI chip market. However, with its focus on open-source technologies and an innovative approach to chip design, Tenstorrent is positioning itself as a formidable player in the evolving AI chip landscape.
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