Tenstorrent, a rising player in the artificial intelligence (AI) hardware and software space, has secured $693 million in a Series D funding round.
The round, which values the company at approximately $2.6 billion, attracted prominent investors such as Jeff Bezos, Samsung Securities, LG Electronics, and Hyundai Motor Group, among others.
The funding highlights growing interest in alternatives to Nvidia’s dominant position in the AI chip market.
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The investment round was co-led by Samsung Securities and AFW Partners, a Seoul-based venture capital firm. Tenstorrent’s Chief Operating Officer Keith Witek expressed enthusiasm about the diverse group of investors backing the company.
“They respect our team, our technology, and our vision,” Witek said in a statement, noting the ~$150 million in deals closed as a sign of commercial viability and market opportunity.
Aiming to Disrupt Nvidia’s Grip on AI Hardware
Tenstorrent, founded in 2016 by Ljubisa Bajic, Ivan Hamer, and Milos Trajkovic, builds AI hardware, provides open-source software for chipmakers, and licenses its technology to clients aiming to design their own silicon. Under the leadership of CEO Jim Keller—a renowned microprocessor engineer who joined the company as CTO in 2020—Tenstorrent has grown into a potential challenger for Nvidia, leveraging its focus on open-source technology.
Central to Tenstorrent’s strategy is its use of RISC-V, an open standard instruction set architecture developed at the University of California, Berkeley. RISC-V enables software to control computer CPUs through royalty-free open-source licenses, offering increased flexibility and cost savings for customers.
In contrast, Nvidia’s proprietary approach requires a significant commitment from its customers, often locking them into the company’s ecosystem of chips and data center layouts. This exclusivity can lead to substantial switching costs, a factor that Tenstorrent aims to exploit by providing interoperable and open-source alternatives.
“In the past, I worked with proprietary tech, and it was really tough,” Keller said in an interview with Bloomberg. “Open source helps you build a bigger platform. It attracts engineers. And yes, it’s a little bit of a passion project.”
Investment from Tech Giants and Visionaries
The backing of investors like Jeff Bezos and leading South Korean conglomerates is seen as Tenstorrent’s potential to shake up the AI chip industry. Samsung, LG, and Hyundai bring strategic value, given their leadership in consumer electronics, automotive technology, and semiconductors. Bezos’ involvement, through Bezos Expeditions, is also perceived as confidence in the company’s vision to carve out a niche in a market long dominated by Nvidia.
Despite the promising funding round, Tenstorrent remains a fraction of Nvidia’s size. Nvidia, the undisputed leader in AI chips, boasts vast resources, a well-established ecosystem, and an entrenched market position. Tech analysts note that transitioning customers from Nvidia’s ecosystem to an open-source alternative will require not only technological excellence but also strategic partnerships and long-term investment.
However, it is believed that the growing demand for flexible and cost-effective solutions could work in Tenstorrent’s favor. The company’s focus on interoperability and its commitment to open standards resonate with an industry increasingly seeking alternatives to monopolistic practices.