AI Chip Startup Tenstorrent Raises $700 Million, Eyes NVIDIA’s Market Share

AI chip startup Tenstorrent has raised more than $693 million in a Series D funding round, valuing the company at $2.6 billion. This investment positions the Santa Clara-based firm as a challenger to Nvidia, the reigning titan of AI hardware. The funding round was led by Samsung Securities and AFW Partners, with significant backing from Jeff Bezos’ Bezos Expeditions, LG Electronics, and Hyundai Motor Group, among other prominent investors.

“We are excited by the breadth of investors that believe in our vision,” Tenstorrent Chief Operating Officer Keith Witek told Bloomberg. “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 artificial intelligence. 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.”

What the Funding Will Fuel

Tenstorrent’s strategy is centered on leveraging the open-source RISC-V architecture, offering developers a more flexible and interoperable alternative to Nvidia’s proprietary ecosystem. By avoiding expensive high-bandwidth memory (HBM), Tenstorrent aims to provide affordable solutions for AI development.

“You can’t beat Nvidia if you use HBM,” Tenstorrent CEO Jim Keller said. “Open source helps you build a bigger platform. It attracts engineers.” With the fresh injection of funds, Tenstorrent plans to:

Expand its engineering team to accelerate chip development

Invest in global supply chains to streamline its AI chip manufacturing

Build AI training servers to showcase its technology to potential customers

Develop open-source software tools for AI and RISC-V chip builders

Build systems and clouds for AI developers

Tenstorrent also plans to release new AI processors every two years. Its first chips, manufactured by GlobalFoundries, will be followed by next-generation designs produced by Taiwan Semiconductor Manufacturing Co. (TSMC) and Samsung Electronics Co.

While Tenstorrent has secured $150 million in customer contracts, a figure dwarfed by Nvidia’s billions in data center revenue each quarter, the startup’s open-source approach and high-profile backing give it a unique edge. By embracing collaboration and interoperability, Tenstorrent is positioning itself as a disruptor in a field dominated by proprietary giants.

Learn more about those giants in our rundown of the top 150 AI companies.
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