Nvidia Challenger Tenstorrent Gets $700 Million to Bolster AI Tech

AI chip startup Tenstorrent has reportedly raised $700 million in its quest to challenge Nvidia.

The investment — from Amazon founder Jeff Bezos and Samsung — values the company at roughly $2.6 billion, Bloomberg News reported Monday (Dec. 2).

Tenstorrent plans to use the funding to expand its engineering team, invest in its supply chain and develop large artificial intelligence (AI) training servers to demonstrate its technology.

As companies increasingly seek more power/cost-efficiency in AI, smaller firms are looking to provide a more affordable alternative to Nvidia and its pricier, high-bandwidth memory (HBM) components, the report said.

“You can’t beat Nvidia if you use HBM, because Nvidia buys the most HBM and has a cost advantage,” Tenstorrent founder Jim Keller told Bloomberg. “But they’ll never be able to bring the price down the way HBM is built into their products and their sockets.”

The report notes that while Nvidia offers developers a suite of proprietary technology designed to function better because they were made together, companies like Tenstorrent aim for greater interoperability with other tech providers.

In addition, Tenstorren also advocates for an alternative kind of logic processor based on an open standard known as RISC-V, a potential challenge to Arm, Bloomberg added.

“In the past, I worked with proprietary tech and it was really tough,” said Keller, a veteran of Apple, Tesla and AMD. “Open source helps you build a bigger platform. It attracts engineers. And yes, it’s a little bit of a passion project.”

He added that Tenstorrent aims to introduce a new AI processor every two years. Nvidia CEO Jensen Huang, meanwhile, said in June that his company will update its chips each year.

Huang last month discussed the future of his company after posting 94% year-over-year revenue growth for the third quarter.

“Many AI services are running 24/7, just like any factory,” Huang said during an earnings call. “We’re going to see this new type of system come online. And I call it [the company’s data centers] an AI factory because that’s really close to what it is. It’s unlike a data center of the past.

“And these fundamental trends are really just beginning,” he added. “We expect this to happen, this growth, this modernization and the creation of a new industry to go on for several years.”