Tenstorrent has secured $1.5 billion in a new funding round that values the chip startup at $6.2 billion, more than doubling its valuation from $2.6 billion in late 2024. The round was led by Trace Capital and Innovation X, alongside institutional and corporate backers including Cadence Ventures, Eclipse, Fidelity, SanDisk, and T. Rowe Price.
Before closing the round, the 10-year-old challenger to Nvidia rejected acquisition offers from Intel and Qualcomm at valuations reaching up to $5 billion. According to CEO Jim Keller, the company chose to maintain its independence after demonstrating that its Galaxy servers could successfully run DeepSeek models. The newly raised capital is earmarked for scaling custom processors designed specifically to serve open-weight AI models and video generation workloads.
Tenstorrent operates within a heavily capital-intensive segment of hardware development aimed at challenging Nvidia’s market share. This hardware race directly impacts the broader economics of AI deployment, as soaring inference infrastructure costs pressure enterprises to look beyond traditional GPU monopolies. Securing robust hardware supply chain dynamics through substantial funding rounds remains critical for alternative silicon providers attempting to break into a market dominated by entrenched players. Competitors in this space include Etched, an AI chip maker that recently fielded investment interest at valuations of $40 billion or more, as tracked by industry reports, highlighting the immense capital required to sustain operations and manufacturing ramp-ups in the current compute landscape.