Bezos backs AI chipmaker vying with Nvidia at $2.6 billion value

Tenstorrent, which hopes to create a chip to try and break Nvidia’s stranglehold on the AI business, raised capital in a funding round led by South Korea’s AFW Partners and Samsung Securities, founder and semiconductor pioneer Jim Keller said in an interview. Bezos Expeditions joined LG Electronics Inc. and Fidelity in that financing, betting on Keller’s pedigree and the booming opportunity in artificial intelligence tech.

The money will be used to build out Tenstorrent’s engineering team, invest in its global supply chain and build large artificial intelligence training servers to help demonstrate its technology.

As the quest for more power and cost efficiency in AI ramps up, smaller companies are sprouting up trying to snatch market share from Nvidia’s power-hungry chips. Tenstorrent, an Nvidia neighbor in Santa Clara, California, is one of many now engineering solutions aimed at delivering a more affordable path to AI development. That’s built on open-source and commonplace technology, avoiding complex and pricey components like the high-bandwidth memory Nvidia favors.

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

Nvidia offers developers a full suite of proprietary technology, covering everything from the chips to the interconnects and even data center layouts, with the promise of all parts working better because they were designed in concert. Companies like rival Advanced Micro Devices Inc. and Tenstorrent are instead aiming for greater interoperability with other technology providers, whether through shared industry standards or opening their designs for others to use.

Tenstorrent is also a proponent of an alternative kind of logic processor based on an open standard called RISC-V, which poses a challenge to Arm Holdings Plc. Keller, known for his silicon design work at Apple Inc., Tesla Inc. and AMD, is an advocate.

“In the past, I worked with proprietary tech and it was really tough,” Keller said. “Open source helps you build a bigger platform. It attracts engineers. And yes, it’s a little bit of a passion project.”

Much like RISC-V and…