Artificial intelligence chip making startup Tenstorrent with ambitions of taking on Nvidia Corp. today announced it closed over $693 million in late-stage funding at a pre-money valuation of $2 billion.

Samsung Securities and AFW Partners led the Series D funding round. The fundraise also attracted participation from many notable investors including XTX Markets, Corner Capital, MESH, Export Development Canada, LG Electronics, Hyundai Motor Group, Fidelity Management & Research Company, Baillie Gifford, Bezos Expeditions and more.

Headquartered in Santa Clara, California, Tenstorrent builds and sells computing systems designed for AI workloads developed around the company’s Tensix cores. The company has placed its vision around disruption Nvidia’s hold on the chip silicon market by designing a more affordable hardware for AI training and deployment by avoiding expensive components such as high-bandwidth memory that Nvidia uses.

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

To reach more potential customers, the company focuses on interoperable hardware design with other providers. It uses an open-standard RISC-V processor architecture, which is designed to allow a more open ecosystem for engineers and developers to adopt its processors and systems into their data center and server setups.

To make this happen, Tenstorrent licenses AI and RISC-V intellectual property to customers that want to own and customize silicon for specialized use. RISC-V is an open-source instruction architecture for developing custom processors for different applications based on what’s called a “reduced instruction set,” which makes it every easy to work with, tailor and optimize for power, performance and features.

The company said it will use the new funding to build out open-source AI software stacks and hire developers to expand global development and design centers. This will allow the company to build systems and clouds for AI developers to use and test models on its systems.

“We find Tenstorrent’s open-source driven approach refreshing, especially in the proprietary and often secretive world of AI accelerators,” said Joshua Leahy, chief technology officer of XTX Markets.

As the company begins to scale up with the new funding, it will be facing headwinds in a market where Nvidia is in ascendency. However, Keller remains confident that by providing a more affordable AI chip that can be tailor-made to business needs and releasing a new processor every two years can help maintain a commercially viable product in the AI chip industry.

Image: Tenstorrent