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

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Tenstorrent has plans to manufacture its new AI chips through TSMC and Samsung.

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Amazon founder Jeff Bezos has reportedly 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 remains 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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Kunal Khullar
Kunal Khullar
News Contributor

Kunal Khullar is a contributing writer at Tom’s Hardware.  He is a long time technology journalist and reviewer specializing in PC components and peripherals, and welcomes any and every question around building a PC.

5 Comments Comment from the forums
  • bit_user
    Congrats to Tenstorrent!

    I'm a bit surprised Altman/OpenAI didn't snap them up, but instead worked with Broadcom on their AI accelerator. I don't actually know anything about Broadcom's solution, but what I've read about Tenstorrent's reminds me a fair bit of Cerebras' WSE, in that they're both tile-oriented dataflow architectures.

    I think the article grossly overemphasizes the RISC-V aspect. It seems to me like a plan B for the business, in case their AI gambit doesn't work out. Their Tensix cores, at least in all the generations I've so far read about, aren't RISC-V, but much more DSP-like. Their original motivation for building RISC-V cores was indeed to use in their products, but mostly at the periphery and not as the main compute workhorses. Then, they (or their investors) probably thought they could keep developing the RISC-V cores and potentially license them, as an alternate revenue stream.
    Reply
  • DS426
    bit_user said:
    ...

    I think the article grossly overemphasizes the RISC-V aspect. It seems to me like a plan B for the business, in case their AI gambit doesn't work out. Their Tensix cores, at least in all the generations I've so far read about, aren't RISC-V, but much more DSP-like. Their original motivation for building RISC-V cores was indeed to use in their products, but mostly at the periphery and not as the main compute workhorses. Then, they (or their investors) probably thought they could keep developing the RISC-V cores and potentially license them, as an alternate revenue stream.
    It also depends on how much you think Jim Keller is a believer in RISC-V. For example, if he really does think it will attract great engineering and other talent, that could make it worthwhile as otherwise nVidia and the other top players will continue to snap up the bulk of great talent in the world.

    Arm zoomed into the datacenter world while RISC-V is still a relatively small player, so it kind of goes back to the problem of: build it and they will come, or let the demand and ecosystems become sufficiently solid before trying to make a big splash?
    Reply
  • bit_user
    DS426 said:
    It also depends on how much you think Jim Keller is a believer in RISC-V. For example, if he really does think it will attract great engineering and other talent, that could make it worthwhile as otherwise nVidia and the other top players will continue to snap up the bulk of great talent in the world.
    What he's previously said about it is that the ISA has the right features to enable an efficient implementation and that he appreciates being able to add custom extensions to support their more proprietary hardware blocks. The icing on the cake is probably the lack of royalties for an architecture license. This makes it perfect for embedded applications, like what they were doing with it.

    I have no idea about the "attracting great engineering talent" aspect. In my opinion, what attracts great talent is a great team and good prospects for the business. Right now, I think they probably don't have much trouble finding the talent they need.

    DS426 said:
    Arm zoomed into the datacenter world
    I wouldn't call it a zoom. It took many years before they achieved significant scale. Entire teams and companies intent on building ARM server CPUs have come & gone, in the time it's taken ARM to achieve a substantial foothold in that market.

    DS426 said:
    while RISC-V is still a relatively small player, so it kind of goes back to the problem of: build it and they will come, or let the demand and ecosystems become sufficiently solid before trying to make a big splash?
    It will happen for geopolitical reasons, if not others. So, the trick is to straddle the embedded and server worlds so that you're positioned to ride the wave when RISC-V gets embraced in datacenters, but not betting your entire business on it by a specific point in time. RISC-V has already achieved scale in the embedded market and there's money to be made there.
    Reply
  • gg83
    Intel Foundry wasn't mentioned. I think there is a weird conspiracy going on with Intel. Something needs to happen with A18 or we will be ten years behind TSMC. It is the Crown Jewel of the Taiwanese government and the US needs that with Intel Foundry.
    Reply
  • bit_user
    gg83 said:
    Intel Foundry wasn't mentioned. I think there is a weird conspiracy going on with Intel.
    Jim Keller seems to have been in TSMC's orbit, for a while. My guess is that everyone at Tenstorrent has experience dealing with TSMC, while nobody there used IFS (because it's basically a new thing). Given their relatively meager initial volumes, they probably view it as not being worth the risk and learning curve to try and use IFS vs. going with the known quantity that is TSMC.

    Startups often take a somewhat counterintuitive view towards risks. As hugely risky endeavors, I think the good ones try to be very selective about where the business takes risks, and then go with tried-and-true in every other case. The only gambles they tend to make are on things fundamental to the business plan. As far as that goes, if IFS only offers them a relatively small savings on manufacturing costs, it's not a key enabler for their business plan. However, if they suffer major delays because of differences between IFS and TSMC or because IFS fails to deliver on its promises, that could easily sink Tenstorrent.

    So, when Tenstorrent becomes big and successful, has a good revenue ramp, established customer base, and substantial production volumes, then I think they'll start to worry about cost optimizations and take a hard look at IFS. Right now, I wouldn't do it in their shoes.

    gg83 said:
    Something needs to happen with A18 or we will be ten years behind TSMC.
    Intel already has big customers lined up for it, including themselves. Any volume Tenstorrent can bring them isn't going to make much difference, I think. Intel needs to deliver on its promises. Once they've done that, for a few generations, then I think they'll find more customers lining up at their doors.
    Reply