Billionaire Jeff Bezos is doubling down on computing companies looking to take advantage of Nvidia’s (NVDA) dominance of the artificial intelligence chip market.
Bezos Expeditions, the Amazon (AMZN) founder’s private investment vehicle, was part of a $693 million funding round for TenTrent, the company announced Monday. He joined LG Electronics and Fidelity in the round led by South Korean companies Samsung Securities and AFW Partners.
“We’re excited about the breadth of investors who believe in our vision,” Keith Witek, Tenstorrent’s chief operating officer, said in a statement. “Looking at this group, we see a good balance of financial and strategic investors, as well as high-profile individuals who believe in our plans for AI. ”
Tenstorrent said it will use the funding to “build an open source AI software stack, hire developers, expand its global development and design centers, and build systems and clouds for AI developers.”
The company strives to provide more accessible and affordable solutions for companies looking to develop AI capabilities, and competes directly with peer Nvidia, based in Santa Clara, California. Tenstorrent says it has signed deals worth about $150 million so far.
Currently the second most valuable company in the world after Apple (AAPL), Nvidia is a Wall Street powerhouse and a giant in the AI chip space. Last month, the company reported fiscal third-quarter revenue of $35.1 billion, but 36% of that revenue, or $12.6 billion, came from just three anonymous customers. Those sales primarily came from Nvidia’s Computing & Networking division, according to the filing.
Nvidia hasn’t disclosed its customers, but top buyers are likely to include Google (GOOGL) parent Alphabet, Meta (META), Microsoft (MSFT), and Tesla (TSLA); Both are major companies in the AI boom.
But as big tech companies corner the market, small businesses struggle to build AI capabilities, and power-hungry AI chips remain prohibitively expensive.
This is where Tenstorrent would like to enter. Founder and CEO Jim Keller told Bloomberg that Tenstorrent leverages open source, commonplace technology to provide engineering solutions that enable more companies to take advantage of AI and provide high-bandwidth He said that expensive and complicated parts such as Memory used by Nvidia (HBM).
“You can’t beat Nvidia when it comes to HBM because they buy the most HBM and have a cost advantage,” Keller said. “But the way HBM is built into products and sockets will never bring the price down.”
Open source technologies are becoming increasingly popular in the AI boom due to their cost-effectiveness. Meta founder and CEO Mark Zuckerberg said Llama 3.2, the company’s first open source multimodal large-scale language model, is the way forward.
“This is like Linux for AI, with closed-source labs reacting by trying to lower prices to compete with Llama,” he said at Meta’s annual Connect conference in September. I’m seeing it,” he said.
Elon Musk’s AI startup xAI has also made its chatbot Grok-1 an open source model.
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