In a bid to compete with Nvidia, Jeff Bezos and Samsung invest $700 million in AI chip startup Tenstorrent

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In a bid to compete with Nvidia, Jeff Bezos and Samsung invest $700 million in AI chip startup Tenstorrent

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founder Jeff Bezos has

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backed a $700 million funding round for Tenstorrent, an AI chip startup, valuing the company at $2.6 billion. The investment, led by South Korea’s AFW Partners and Samsung Securities, positions Tenstorrent as a serious competitor to Nvidia which is currently the dominant player in the AI chip market. Other investors include LG Electronics, Fidelity, and Hyundai Motor Group.

Tenstorrent, headquartered in Santa Clara, California, plans to use the funds to expand its engineering team, strengthen its global supply chain, and build AI training servers to showcase its technology. The startup aims to develop chips that offer more cost-effective and power-efficient solutions for AI development, leveraging open-source technology and avoiding the costly high-bandwidth memory (HBM) favored by Nvidia.

“You can’t beat Nvidia if you use HBM, because Nvidia buys the most HBM and has a cost advantage. But they’ll never be able to bring the price down the way HBM is built into their products and their sockets,” said Tenstorrent CEO Jim Keller.

Unlike Nvidia’s proprietary ecosystem, Tenstorrent is focusing on interoperability with other technology providers. It advocates for the open-standard RISC-V processor architecture, which Keller believes attracts engineers and fosters innovation.

Tenstorrent’s approach reflects a growing trend in the AI chip industry, where startups are challenging Nvidia’s dominance by offering alternatives tailored to specific needs. While Nvidia generates tens of billions in datacenter revenue each quarter, Tenstorrent has secured nearly $150 million in contracts—a modest figure but a signal of its potential.

The company aims to release a new AI processor every two years. Its first chips were manufactured by GlobalFoundries, with future iterations planned through Taiwan Semiconductor Manufacturing Co. (TSMC) and Samsung. Tenstorrent is also exploring 2-nanometer chip designs, aligning with TSMC and Samsung’s production timelines and Japan’s Rapidus Corp., which targets 2nm output by the year 2027.

As Tenstorrent scales up, it faces the challenge of proving its technology in a market where Nvidia’s dominance ******** unmatched. However, with backing from high-profile investors and an innovative open-source approach, it’s positioned as a formidable challenger in the AI chip landscape.

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