Challenge Nvidia! Bezos and Samsung heavily invest in AI chip newcomer Tenstorrent

According to Zhitong Finance APP, Amazon (AMZN.US) founder Jeff Bezos has teamed up with Samsung to invest $700 million in Tenstorrent, valuing the ambitious AI chip startup, which aims to challenge Nvidia (NVDA.US), at approximately $2.6 billion.

Tenstorrent hopes to develop a chip that attempts to break Nvidia's monopoly in the AI field. Jim Keller, the founder and semiconductor pioneer of Tenstorrent, stated that the company secured funding in a round led by Korean AFW Partners and Samsung Securities. Bezos's family office, Bezos Expeditions, along with LG Electronics and Fidelity, participated in this round of financing, betting on Keller's expertise and the burgeoning opportunities in AI technology.

The funds will be used to build Tenstorrent's engineering team, invest in its global supply chain, and establish large AI training servers to help showcase its technology.

As the AI field increasingly chases more powerful and cost-effective chips, smaller companies are emerging rapidly, attempting to capture market share from Nvidia's power-hungry chips. Tenstorrent is one of many companies aiming to provide more affordable solutions for AI development. It is built on open-source and general-purpose technologies, avoiding the use of complex and expensive components, such as the high-bandwidth memory (HBM) favored by Nvidia.

Keller stated, "If you use HBM, you cannot beat Nvidia because Nvidia buys the most HBM and has a cost advantage. But they can never lower prices in the way that HBM is built into their products and slots."

Nvidia provides developers with a full suite of proprietary technologies covering all aspects from chips to interconnects and even data center layouts. Competitors like AMD (AMD.US) and Tenstorrent aim to enhance interoperability with other technology providers, whether through sharing industry standards or open designs for others to use.

Tenstorrent also supports an alternative logic processor based on the open standard RISC-V, which poses a challenge to Arm Holdings (ARM.US).

Keller is known for his chip design work at Apple, Tesla, and AMD. He stated, "In the past, I used proprietary technology, which was really difficult. Open source can help you build a larger platform. It attracts engineers. Yes, this is a passionate project."

So far, the new company has signed contracts totaling nearly $150 million with clients, which seems insignificant compared to Nvidia's quarterly data center revenue of hundreds of billions of dollars.

Keller indicated that Tenstorrent plans to release a new AI processor every two years. On the other hand, Nvidia CEO Jensen Huang stated in June that the company plans to update its AI chip products annually Tenstorrent stated that its first batch of chips is manufactured by GlobalFoundries (GFS.US), and the next generation of chips will be produced by TSMC (TSM.US) and Samsung Electronics.

Other investors participating in this round of financing for Tenstorrent include the Canada Export Development Corporation, the Ontario Pension Plan, Hyundai Motor Group, and Baillie Gifford