Jeff Bezos Backs AI Chipmaker Tenstorrent in $2.6 Billion Bet
Dec 3
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Jeff Bezos, the founder of Amazon, has joined forces with prominent investors such as Samsung and LG to back Tenstorrent, an AI hardware startup aiming to challenge Nvidia's dominance in the AI chip market. The Toronto-based company raised an impressive $693 million in a Series D funding round led by Samsung Securities and South Korea's AFW Partners. Other notable contributors include Bezos Expeditions, Hyundai Motor Group, Fidelity, LG Electronics, and Export Development Canada. The funding round values Tenstorrent at more than $2.6 billion.
Tenstorrent, founded in 2016, is led by Jim Keller, a renowned microprocessor engineer with a remarkable track record, including work at Apple, Tesla, and AMD. Keller's vision for Tenstorrent centers on creating chips and systems specifically designed for artificial intelligence workloads. The company plans to use the newly acquired capital to expand its engineering team, invest in its global supply chain, and develop large AI training servers to showcase its cutting-edge technology. The goal is to deliver affordable, efficient AI solutions that address the growing demand for computational power in artificial intelligence.
Tenstorrent is positioning itself as a formidable competitor to Nvidia, which has long dominated the AI chip market with its proprietary technology and high-bandwidth memory (HBM) components. Keller believes using HBM makes it nearly impossible to compete with Nvidia in terms of cost, as the company's scale allows it to secure components at an unmatched price advantage. Instead, Tenstorrent focuses on open-source and widely accessible technologies, emphasizing greater interoperability with other tech providers. Tenstorrent aims to offer developers a more flexible and cost-effective path to AI innovation by avoiding the proprietary constraints that characterize Nvidia's approach.
Central to Tenstorrent's strategy is its adoption of RISC-V, an open-standard logic processor that challenges the proprietary designs of companies like Arm Holdings. A passionate advocate for open-source technology, Keller believes that RISC-V provides a platform for broader collaboration and innovation. He noted that open-source frameworks attract talented engineers and foster a larger ecosystem, enabling more rapid technological advancements.
Although still in its early stages, Tenstorrent has made significant strides. The company has signed nearly $150 million in customer contracts and plans to release new AI processors every two years. GlobalFoundries produced its first chips, while upcoming iterations will be manufactured by Taiwan Semiconductor Manufacturing Co. (TSMC) and Samsung Electronics.
Tenstorrent has already begun designing for cutting-edge 2-nanometer fabrication technology, which TSMC and Samsung are expected to mass-produce next year. Discussions are also underway with Japan's Rapidus Corporation, which aims to achieve 2-nanometer output by 2027.
Tenstorrent'sIts partnerships with prominent global players bolster Tenstorrent's ambitions. AFW Partners became an investor after hearing positive feedback from Korean companies collaborating with Tenstorrent, such as LG. Other investors include the Healthcare of Ontario Pension Plan and Baillie Gifford, further underscoring the startup's international appeal and credibility.
Despite its progress, Tenstorrent faces a steep uphill climb in its bid to disrupt Nvidia's stronghold. Nvidia generates tens of billions of dollars in data center revenue each quarter and refreshes its AI chip lineup annually. In contrast, Tenstorrent's more gradual release schedule—introducing new processors every two years—reflects the challenges of scaling operations and competing with an industry giant.
Keller remains optimistic about Tenstorrent's potential to redefine the AI chip landscape. The company is carving out a unique position in the market by prioritizing open-source technology, cost efficiency, and interoperability. With the backing of influential investors like Jeff Bezos, Samsung, and LG, Tenstorrent is well-positioned to make its mark in the rapidly evolving world of artificial intelligence.