Tenstorrent raises $1.5B at $6.2B to challenge Nvidia
Tenstorrent raised $1.5 billion at a $6.2B valuation to scale its open RISC-V AI chips and Galaxy servers, doubling its value in the fight against Nvidia.
A 10-year-old AI chip startup called Tenstorrent announced on October 19 that it raised $1.5 billion in new funding, valuing the company at $6.2 billion. The Santa Clara company, led by legendary chip designer Jim Keller, builds AI chips and servers based on the open RISC-V architecture - and it wants to take a real bite out of Nvidia's dominance.
The $1.5 billion round
The Series E round was led by Trace Capital, a new firm started by Quiet Capital co-founder Ben Mahdavi, together with Innovation X. Other backers include Cathie Wood's ARK Invest, SanDisk, Morgan Stanley, T. Rowe Price, Tether Investments, Cadence Ventures, Eclipse and Fidelity. The round more than doubled Tenstorrent's valuation from about $2 billion in December 2024, when it raised more than $693 million. The company says the new money will go toward scaling production of its Galaxy servers, which combine dozens of its AI chips to power chatbots, coding assistants and video generators.
Open chips, not Nvidia's way
Tenstorrent's bet is on RISC-V, an open-source chip architecture that lets companies design processors without paying license fees and reduces dependence on proprietary ecosystems like Arm's. CEO Jim Keller, who previously led Tesla's self-driving chip effort and held key design roles at Apple and AMD, told Bloomberg the company decided to stay independent and raise more capital after showing that its Galaxy servers could run DeepSeek models. That choice came just five months after Bloomberg reported acquisition interest from Intel and Qualcomm at valuations of as much as $5 billion. The new capital will fund chips tailored for serving open-weight AI models and video generation.
A crowded chip race
Tenstorrent is part of a wave of AI hardware startups trying to chip away at Nvidia's lead. TechCrunch reported earlier this month that another AI chip maker, Etched, was fielding investment offers at valuations of $40 billion or more. Meanwhile, power supply is becoming a real constraint - Microsoft recently pulled back from a major British AI data-center project over electricity concerns. The race for AI computing is no longer only about who makes the fastest chip, but who can deliver it at scale and keep it powered.
Why it matters
AI models are getting cheaper to train but expensive to run, and the chips that handle day-to-day AI work - called inference - are where much of the industry's future money will be made. By betting on open hardware instead of closed ecosystems, Tenstorrent is giving cloud providers and AI companies a second source beyond Nvidia, which could push prices down across the industry. The company is still far smaller than Nvidia, but a $1.5 billion war chest means it no longer has to sell out to survive - it can afford to stay independent and keep building.