AI chip startup Tenstorrent has raised $1.5 billion in a Series E funding round, reaching a $6.2 billion valuation as it expands production of processors designed for AI inference and open-weight models. The funding comes five months after the company reportedly attracted acquisition interest from Intel and Qualcomm, with potential valuations reaching $5 billion.
The funding round announced on October 19 was co-led by Trace Capital and Innovation X, with participation from Cadence Ventures, Eclipse, Fidelity, Sandisk, and T. Rowe Price. Other investors included ARK Invest, Morgan Stanley, and Tether Investments.
The latest investment more than doubles Tenstorrent’s previous valuation of $2.6 billion in December 2024. Trace Capital, one of the lead investors, is a newly established investment firm founded by Quiet Capital co-founder Ben Mahdavi.
Tenstorrent Chooses Funding Over Acquisition Offers
Founded in 2016, Tenstorrent develops AI processors and computing systems designed to compete with Nvidia’s hardware. The company is led by CEO Jim Keller, a microprocessor engineer who previously held senior technical roles at Apple, AMD, Intel, and Tesla.
According to a Bloomberg report, Intel and Qualcomm expressed interest in acquiring Tenstorrent earlier this year. However, Keller said the company decided to remain independent and raise additional funding after demonstrating that its Galaxy servers could run DeepSeek AI models.
Tenstorrent’s Galaxy systems combine multiple AI processors to support inference workloads, including chatbots, coding assistants, and video generation. The company develops its hardware using RISC-V, an open instruction set architecture that allows chip designers to develop processors without relying on proprietary architecture licenses.
New Funding to Support Galaxy Servers and AI Inference
Tenstorrent plans to use the new capital to increase chip manufacturing capacity, expand Galaxy server deployments, and support international commercial operations. The company will also continue developing AI processor and CPU intellectual property that customers can license for their own semiconductor designs.
Its systems support applications ranging from individual developer workstations to larger server clusters used for AI processing. The company is focusing on running open-weight AI models, which organizations can deploy and customize on their own computing infrastructure.
Tenstorrent’s latest investment comes as other AI chip developers seek funding to compete in the inference hardware market. Earlier in October, Etched, another startup developing processors for AI workloads, was reportedly receiving investment offers at valuations of $40 billion or more.
Featured image credits: Magnific.com
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