Tenstorrent, a promising AI chip startup positioning itself as a formidable competitor to Nvidia, has successfully closed a massive $693 million Series D funding round, valuing the company at approximately $2.6 billion. The funding round attracted an impressive roster of high-profile investors, including Jeff Bezos through Bezos Expeditions, Samsung Securities, LG Electronics, and Hyundai Motor Group, signaling strong confidence in the company’s vision for AI hardware innovation.
Samsung Securities and AFW Partners, a Seoul-based venture capital firm, led the investment round alongside other strategic and financial investors. The diverse investor base reflects growing interest in alternatives to Nvidia’s dominant position in the AI chip market.
Founded in 2016 by Ljubisa Bajic, Ivan Hamer, and Milos Trajkovic, Tenstorrent gained significant momentum when renowned microprocessor engineer Jim Keller joined as Chief Technology Officer in 2020. Keller, celebrated for his groundbreaking work at Apple and Tesla, became CEO in 2023, bringing credibility and technical expertise to the startup’s ambitious mission.
Tenstorrent’s strategy centers on open-source technology and increased interoperability, directly challenging Nvidia’s proprietary approach. The company builds AI hardware, provides open-source software for chip builders, and licenses products to clients designing custom silicon. With 10 offices worldwide and approximately $150 million in closed deals, Tenstorrent demonstrates strong commercial traction.
The company champions RISC-V, an open standard instruction set architecture developed at the University of California, Berkeley. This royalty-free, open-source approach defines how software controls CPUs and represents a stark contrast to Nvidia’s proprietary ecosystem. Nvidia’s closed approach—from chips to specific data center layouts—creates significant switching costs for customers, potentially locking them into the platform.
Tenstorrent COO Keith Witek emphasized the significance of their diverse investor base, noting it includes “a balance of financial investors and strategic investors, as well as some notable individuals that have conviction in our plans for AI.” The strong commercial traction evidenced by closed deals signals genuine market opportunity in the rapidly expanding AI infrastructure sector.
Key Quotes
We are excited by the breadth of investors that believe in our vision. If you look at this group, you see a balance of financial investors and strategic investors, as well as some notable individuals that have conviction in our plans for AI.
Tenstorrent COO Keith Witek emphasized the significance of their diverse investor base, highlighting how the mix of financial backers, strategic corporate partners, and high-profile individuals like Jeff Bezos demonstrates broad confidence in the company’s AI vision and technology.
They respect our team, our technology, and our vision. They see the ~$150M in deals closed as a strong signal of commercial traction and opportunity in the market.
Witek continued, pointing to the company’s substantial closed deals as concrete evidence of market demand and commercial viability, which helped attract this impressive roster of investors to the funding round.
In the past, I worked with proprietary tech, and it was really tough. Open source helps you build a bigger platform. It attracts engineers. And yes, it’s a little bit of a passion project.
CEO Jim Keller, drawing on his extensive experience at Apple and Tesla, explained his philosophical commitment to open-source technology and how it creates advantages in platform development and talent attraction compared to proprietary approaches.
Our Take
Tenstorrent’s massive funding round signals a potential paradigm shift in AI infrastructure. While Nvidia remains the undisputed leader, the company’s proprietary approach creates vulnerabilities that open-source alternatives can exploit. Jim Keller’s involvement is particularly significant—his track record of revolutionary chip designs at Apple and Tesla lends enormous credibility to Tenstorrent’s technical vision.
The strategic investor composition is telling: Samsung, LG, and Hyundai represent major manufacturers seeking AI capabilities without Nvidia dependency. This suggests Tenstorrent isn’t just building chips for data centers but potentially enabling AI integration across consumer electronics, automotive systems, and industrial applications. The RISC-V approach could become the Linux of AI hardware—an open standard that enables innovation while reducing costs. However, Tenstorrent faces the monumental challenge of competing against Nvidia’s mature ecosystem, developer tools, and market dominance. Success will require not just superior technology but building a comprehensive platform that makes switching worthwhile.
Why This Matters
This funding round represents a critical inflection point in the AI chip industry, where Nvidia currently commands over 80% market share. Tenstorrent’s success in attracting major corporate investors like Samsung, LG, and Hyundai—alongside tech visionary Jeff Bezos—validates the market’s appetite for alternatives to Nvidia’s proprietary ecosystem.
The open-source approach championed by Tenstorrent could fundamentally reshape AI infrastructure development. As AI adoption accelerates across industries, companies increasingly seek flexibility and interoperability to avoid vendor lock-in. The high switching costs associated with Nvidia’s proprietary technology create opportunities for competitors offering more adaptable solutions.
For businesses investing heavily in AI infrastructure, this development signals emerging options that could reduce costs and increase flexibility. The involvement of major electronics manufacturers like Samsung and LG suggests potential integration into consumer and enterprise products, potentially democratizing access to advanced AI capabilities. This competition could drive innovation, reduce prices, and accelerate AI adoption across sectors, ultimately benefiting the broader technology ecosystem and end users.
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Source: https://www.businessinsider.com/samsung-jeff-bezos-nvidia-rival-tenstorrent-funding-2024-12