Key insights
- TensorWave's Series B funding round, valuing it at $1.55 billion with significant investment from AMD, highlights growing competition in the AI hardware market beyond Nvidia. This development suggests potential shifts in AI infrastructure supply chains and increased demand for alternative chip providers, which could impact semiconductor sector dynamics and related technology stocks.
Investing.com - TensorWave closed its Series B funding round at a post-money valuation of $1.55 billion, raising $350 million in an investment led by Advanced Micro Devices (NASDAQ:AMD) and hedge fund Magnetar Capital, according to reporting from the Wall Street Journal. The Las Vegas-based cloud-computing startup exclusively uses hardware and software made by AMD rather than market leader Nvidia.
The investment nearly quadruples TensorWave’s value from about a year ago, when the startup raised $100 million in a round led by Magnetar and AMD that valued the company at around $400 million. TensorWave will use the fresh capital to fill more data centers with chips from AMD.
Darrick Horton, the 28-year-old co-founder and chief executive of TensorWave, says the startup refuses to use Nvidia’s graphics processing units or other products out of concern that Nvidia controls too much of the AI infrastructure market. "We wanted to figure out how we can solve problems for customers and restore competition to the market," Horton says. "I don’t like buying things from monopolies. You don’t have a lot of leverage."
Horton says that in 2023, when TensorWave started, Nvidia was "a monopoly by default" and that customers were eager to diversify into alternative suppliers.
Startups and larger companies are seeking to provide AI labs and large enterprise customers with computing alternatives besides Nvidia. That includes Cerebras, which makes platter-size chips used for running AI models quickly and which went public last month, Majestic Labs AI, which produces chips with vast amounts of memory, and Decart, whose software makes it easier to switch between computing technologies.
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