The artificial intelligence (AI) frenzy that kicked off with the release of ChatGPT late last year doesn’t seem to be losing steam as investors continue to pour billions of dollars into regenerative AI startups.
In the first half of 2023, AI startups raised a massive $25 billion in funding, accounting for 18% of the total global funding raised during that period. Now, the newest player to join this thriving trend is Tenstorrent, a Canadian AI computing startup that’s that is developing AI chips.
Led by chip industry veteran Jim Keller, Tenstorrent announced on Wednesday that it has raised $100 million in fresh funding from prominent backers, including Hyundai Motor Group and a Samsung investment fund, among others.
Prior to this funding round, Tenstorrent had already raised $234.5 million at a $1 billion valuation, making the startup a member of the highly coveted unicorn club. It’s noteworthy that Tenstorrent is among a growing group of ambitious startups aiming to take on Nvidia, the current market leader in providing chips for developing artificial intelligence products like ChatGPT.
While the competition in the AI chip space is heating up and with substantial financial backing, Tenstorrent is positioning itself as a formidable challenger in this rapidly evolving market. Earlier this year, Keller, known for his chip development work at Apple, Tesla, and Intel, took the reins as CEO of Tenstorrent.
In a recent funding announcement, Tenstorrent also revealed that it raised $30 million from Hyundai and $20 million from Kia, with the remaining $50 million coming from Samsung’s Catalyst Fund and a selection of other investors, such as Fidelity Ventures, Eclipse Ventures, Epiq Capital, and Maverick Capital.
This development marks a significant return to automotive technology for Keller, who has a wealth of experience at Tesla. While Tenstorrent’s primary focus lies in developing chips to compete with Nvidia in data centers, it is also working on AI chips for various applications, including a recent partnership with LG for chips intended for use in smart televisions.
Interestingly, the funding round was structured as debt that will later convert to stock, which means Tenstorrent won’t have an official new valuation until it conducts another equity fundraising round, which they plan to do next year. As of now, Tenstorrent declined to comment on the specific details of the convertible debt.
Tenstorrent not only produces its own AI chips but also licenses its intellectual property and technology to other companies interested in creating their own AI chips. Hyundai’s semiconductor development group, established last year, is planning to leverage Tenstorrent’s technology in future vehicles from Hyundai, Kia, and Genesis brands. This highlights the company’s broader vision and the potential impact its technology could have on various industries, including automotive.
“With this investment, the Group expects to develop optimized but differentiated semiconductor technology that will aid future mobilities and strengthen internal capabilities in AI technology development,” Heung-soo Kim, executive vice president and head of the global strategy office at Hyundai Motor Group, said in a statement.