Amazon.com Inc. founder Jeff Bezos has partnered with Samsung to invest $700 million in Tenstorrent, an AI chip startup, valuing the company at approximately $2.6 billion. The funding round was led by South Korea's AFW Partners and Samsung Securities, with participation from Bezos Expeditions, LG Electronics Inc., and Fidelity.
Tenstorrent aims to develop a chip to compete with Nvidia Corp., focusing on cost efficiency and power. The investment will support the expansion of Tenstorrent’s engineering team, enhance its global supply chain, and facilitate the creation of large AI training servers.
Located in Santa Clara, California, Tenstorrent is positioning itself as a more affordable alternative in the AI market, leveraging open-source technology to avoid the costly components favored by Nvidia, such as high-bandwidth memory (HBM).
Founder Jim Keller noted, 'You can't beat Nvidia if you use HBM, because Nvidia buys the most HBM and has a cost advantage.' He emphasized the importance of interoperability with other technology providers through shared industry standards.
Tenstorrent is also advocating for an alternative logic processor based on the open standard RISC-V, challenging Arm Holdings Plc. Keller, recognized for his previous work with Apple Inc., Tesla Inc., and AMD, stated that open-source technology fosters a larger platform and attracts engineers.
To date, Tenstorrent has secured contracts worth nearly $150 million, a figure significantly lower than Nvidia's quarterly datacenter revenue in the tens of billions. The company plans to release a new AI processor every two years, while Nvidia refreshes its offerings annually.
The latest funding round also included investments from Export Development Canada, Healthcare of Ontario Pension Plan, Hyundai Motor Group, and Baillie Gifford.