TL;DR:
- Canadian startup Tenstorrent secures a significant $100 million investment from Hyundai Motor Group and Samsung, along with other investors.
- The funding round led by industry veteran Jim Keller brings the company’s valuation to $1 billion.
- Tenstorrent aims to challenge Nvidia, the leading supplier of chips for artificial intelligence products.
- Hyundai and Kia contribute $30 million and $20 million, respectively, while Samsung’s Catalyst Fund and others invest the remaining $50 million.
- Tenstorrent, led by Jim Keller, is known for developing AI chips for data centers and various other applications, including smart televisions.
- The funding was structured as convertible debt, with another equity fundraising round expected next year.
- The collaboration with Hyundai is expected to enhance semiconductor technology for future mobility and strengthen AI development capabilities.
Main AI News:
In a major funding milestone, Canadian AI chip firm Tenstorrent has successfully raised $100 million in investments, with contributions from prominent players like Hyundai Motor Group and Samsung. The funding round, announced on Wednesday, also saw participation from other notable investors.
Led by industry veteran Jim Keller, Tenstorrent has been making waves in the chip development sector, and this recent funding adds to the $234.5 million it had raised previously. The infusion of capital has propelled the startup’s valuation to an impressive $1 billion, solidifying its position as a formidable contender to challenge Nvidia, a market leader renowned for supplying chips used in artificial intelligence applications such as ChatGPT.
With a wealth of experience developing chips for renowned giants like Apple, Tesla, and Intel, Jim Keller took the reins as Tenstorrent’s CEO earlier this year, marking a notable addition to the startup’s leadership.
The investment breakdown reveals that Hyundai and Kia were significant contributors, providing $30 million and $20 million, respectively. Samsung’s Catalyst Fund and other investors, including Fidelity Ventures, Eclipse Ventures, Epiq Capital, and Maverick Capital, collectively contributed the remaining $50 million.
While Tenstorrent is primarily focusing on developing chips to challenge Nvidia’s dominance in data centers, the company is also actively involved in creating AI chips for diverse applications. A testament to this is the deal announced in May with LG, wherein Tenstorrent will supply chips for smart televisions.
The funding round was structured as a debt arrangement, which will later convert to stock. Consequently, a definitive new valuation for Tenstorrent will emerge once it conducts another round of equity fundraising, anticipated to take place next year. However, Tenstorrent refrained from disclosing further details about the convertible debt.
In addition to manufacturing its own AI chips, Tenstorrent also licenses its intellectual property and other technologies to clients seeking to develop their AI chips. Hyundai, already an emerging player in the semiconductor development space, has expressed intentions to leverage Tenstorrent’s cutting-edge technology in future models across its Hyundai, Kia, and Genesis vehicles.
In a statement, Heung-soo Kim, the Executive Vice President and Head of the Global Strategy Office at Hyundai Motor Group, highlighted the potential of this collaboration, stating, “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.”
Conclusion:
The $100 million investment in Tenstorrent signifies the growing significance of AI chips in the market and reflects investors’ confidence in the startup’s potential to challenge Nvidia’s dominance. This funding milestone could propel Tenstorrent to the forefront of AI chip development and open new opportunities for the automotive industry, as evident from Hyundai’s plans to incorporate the company’s technology in its future vehicles. As the competition intensifies, Tenstorrent’s innovative solutions and strategic partnerships position them favorably in the dynamic AI chip market.
