Led by chip industry veteran Jim Keller, Tenstorrent announced that it has raised $100 million in fresh funding.
The enthusiasm surrounding artificial intelligence (AI), sparked by the launch of ChatGPT in recent months, shows no signs of waning, with investors consistently injecting billions of dollars into innovative regenerative AI startups.
During the first half of 2023, the AI sector experienced a remarkable surge in funding, with startups collectively securing a staggering $25 billion, constituting 18% of the total global funding during this period. Adding to this dynamic landscape is the emergence of Tenstorrent, a Canadian AI computing startup dedicated to crafting AI chips.
Under the leadership of chip industry veteran Jim Keller, Tenstorrent recently unveiled its accomplishment of securing $100 million in new funding. This investment comes from prominent supporters, including Hyundai Motor Group and a Samsung investment fund, among others.
Before this funding infusion, Tenstorrent had already amassed $234.5 million, valuing the company at $1 billion and propelling it into the esteemed realm of unicorn startups. Notably, Tenstorrent is part of a growing cohort of ambitious ventures poised to challenge Nvidia, the reigning leader in providing chips for AI-related ventures such as ChatGPT.
Amidst the escalating competition within the AI chip sector, Tenstorrent is strategically positioning itself as a robust contender within this swiftly evolving market. Steered by Jim Keller, renowned for his chip development contributions at Apple, Tesla, and Intel, Tenstorrent has orchestrated a remarkable transformation under his leadership as the company’s CEO.
In a recent funding disclosure, the company not only showcased its financial achievements but also unveiled its partnerships and investments. The startup secured $30 million from Hyundai and an additional $20 million from Kia. The remaining $50 million was contributed by Samsung’s Catalyst Fund and a consortium of other notable investors, including Fidelity Ventures, Eclipse Ventures, Epiq Capital, and Maverick Capital. This confluence of substantial investments signifies the profound confidence in Tenstorrent’s potential and its pivotal role in shaping the future of AI chip technology.
This marks a substantial reentry into the realm of automotive technology for Keller, leveraging his extensive expertise gained at Tesla. While Tenstorrent primarily directs its efforts towards the development of chips aimed at competing with Nvidia in data centers, it is concurrently engaged in crafting AI chips for diverse applications. Notably, a recent collaboration with LG underscores Tenstorrent’s role in producing chips tailored for smart television usage.
A distinctive aspect of the funding round lies in its configuration as debt, set to eventually transform into stock. This approach means that Tenstorrent’s official new valuation will be determined following a subsequent equity fundraising round, scheduled for the coming year. Tenstorrent, at this juncture, has refrained from disclosing the intricate specifics of the convertible debt structure.
The A.I Startup not only manufactures its own AI chips but also licenses its intellectual property and technological innovations to other enterprises interested in developing their own AI chips. An illustration of this strategic partnership is Hyundai’s semiconductor development group, which was established last year. This group intends to integrate Tenstorrent’s cutting-edge technology into future vehicles across Hyundai, Kia, and Genesis brands. This partnership underscores the comapany’s expansive vision and the potential transformative influence of its technology on diverse sectors, including the automotive industry.
“In light of this investment, the Group anticipates the cultivation of finely tuned yet distinct semiconductor technology, poised to enhance forthcoming mobility solutions and fortify our in-house proficiencies in AI technology advancement,” remarked Heung-soo Kim, Executive Vice President and Head of the Global Strategy Office at Hyundai Motor Group.