Tenstorrent raises $1.5bn to challenge Nvidia
Key takeaways
- Tenstorrent raised $1.5 billion at a $6.2 billion valuation, more than double its roughly $2.6 billion December 2024 valuation.
- The funding will scale deployment of Galaxy servers built on the open RISC-V instruction set.
- Jim Keller, who helped develop AMD's Zen and contributed to Apple's A-series chips, leads the company.
AI chip startup Tenstorrent has raised $1.5 billion in Series E funding, valuing the company at $6.2 billion. The round, led by Trace Capital and Innovation X with backing from ARK Invest, Fidelity, Morgan Stanley and others, more than doubled the company's valuation from roughly $2.6 billion in December 2024.
Tenstorrent plans to use the funding to scale deployment of its Galaxy servers, which combine multiple AI processors to run applications such as large language models, coding assistants and video generation systems. The company's processors are built around RISC-V, an open instruction set architecture that allows chip designers to develop compatible processors without paying architecture licensing fees.
The Santa Clara startup is led by Jim Keller, a semiconductor industry veteran who helped develop AMD's Zen processor architecture, contributed to Apple's early A-series chips, and led Tesla's custom self-driving chip efforts. In a Bloomberg interview last December, Keller argued that relying on high-bandwidth memory creates a cost disadvantage for rivals: "You can't beat Nvidia if you use HBM."
The competitive pitch
Unlike Nvidia, whose CUDA software ecosystem has established its dominance in AI infrastructure, Tenstorrent is betting that customers want greater control over the chips and software running their AI workloads. The company combines its chip designs with an open-source software stack to offer businesses an alternative to proprietary hardware and software systems.
Tenstorrent also licenses its TT-Ascalon RISC-V CPU and Tensix AI cores to customers designing their own chips, including Samsung and LG. This licensing model lets the company serve customers seeking greater control over their infrastructure without developing every component themselves.
The challenge ahead
The $6.2 billion valuation reflects investor confidence in Tenstorrent's strategy, but the company has yet to demonstrate that its approach can challenge Nvidia at comparable commercial scale. Building competitive chips is one hurdle; making them affordable, commercially available, and attractive to developers already invested in Nvidia's ecosystem is another. The next test will be whether Tenstorrent can translate its engineering ambitions and billion-dollar funding into meaningful adoption in the global AI computing market.
