AI chip startup Tenstorrent has raised nearly $700 million in its latest funding round, propelling its valuation to $2.6 billion.
The investment, led by South Korea’s AFW Partners and Samsung Securities, marks a significant step in Tenstorrent’s bid to compete with Nvidia in the rapidly growing AI chip sector.
Notable tech figures, including Amazon founder Jeff Bezos through his firm Bezos Expeditions, have backed Tenstorrent’s vision. Other investors include Samsung Electronics, LG Electronics, Fidelity Management & Research Company, Hyundai Motor Group, Export Development Canada, Healthcare of Ontario Pension Plan, and Baillie Gifford.
Tenstorrent, led by semiconductor pioneer Jim Keller, focuses on developing cost-effective and power-efficient AI chips. Unlike Nvidia, which relies on high-bandwidth memory (HBM), Tenstorrent uses open-source technology and standard components to reduce costs.
Keller asserts that the use of HBM gives Nvidia an insurmountable cost advantage, which his company aims to avoid by leveraging open-standard RISC-V processor architecture.
The startup plans to utilize its funding to expand its engineering team, enhance its global supply chain, and build AI training servers to demonstrate its technology. Tenstorrent aims to release a new AI processor every two years, aligning with the industry’s rapid innovation pace.
Tenstorrent’s manufacturing strategy includes partnerships with major chip fabricators, including GlobalFoundries, Taiwan Semiconductor Manufacturing Co. (TSMC), and Samsung. The company is exploring 2-nanometer chip designs, with TSMC and Samsung targeting 2nm output by 2027, alongside Japan’s Rapidus Corp.
While Nvidia dominates the AI chip market, generating billions in quarterly datacenter revenue, Tenstorrent’s funding, strategy, and backing position it as a potential challenger in the sector.
