Canadian-founded, United States (US)-based artificial intelligence (AI) hardware company Tenstorrent has secured more than $693 million USD in Series D funding from a slew of big-name investors, including Amazon founder Jeff Bezos’s investment firm and electronics giant Samsung.
The AI chipmaker said it plans to use the funding to build out its open-source AI software stacks, ramp up hiring, expand its global development and design centres, and build systems and clouds for AI developers as it gears up to compete with Nvidia and other players in the AI chip space.
The all-primary Series D financing, which closed last week, was led by a pair of existing backers, South Korea’s AFW Partners and Samsung Securities, and gave Tenstorrent a post-money valuation of $2.6 billion. The round consisted of over $593 million in equity and a $100-million convertible note from 2023 that became equity as part of this round. This fresh capital brings Tenstorrent’s total funding to date to nearly $1 billion.
“Canada is at the heart of everything we do.”
Bob Grim,
Tenstorrent
In an interview with BetaKit, Tenstorrent vice president of investor relations and corporate communications Bob Grim attributed the company’s successful financing to continually strong interest in AI and the vision and pedigree of CEO Jim Keller.
The Series D announcement comes shortly after Tenstorrent quietly relocated from Canada to the US, moving its headquarters from Toronto to Santa Clara, Calif.
Grim told BetaKit that the company went stateside for two main reasons. He noted that one of its larger investors wanted to increase its stake, but had a cap on how much it could own if Tenstorrent was based outside of the US. He also said moving to the US is “a very common step” ahead of an eventual initial public offering (IPO) on the Nasdaq or New York Stock Exchange.
Despite the move, Tenstorrent has not left Canada altogether: the company has retained its office in Toronto, where Grim said it employs 140 people today, up from 110 earlier this year.
Grim emphasized that Canada remains a focus for Tenstorrent going forward, and said the firm has committed to continuing to grow its workforce in Canada as part of its latest round, which was supported by three new Canadian investors: Export Development Canada, the Healthcare of Ontario Pension Plan, and Georgian.
“Canada is at the heart of everything we do … That’s where our roots are, that’s where we design our AI hardware, and it’s going to remain important to us for the foreseeable future,” Grim said.
Tenstorrent’s Series D round also saw participation from new investors, including US-based Bezos Expeditions and Corner Capital, South Korea’s LG Electronics, and XTX Markets and Baillie Gifford out of the United Kingdom, plus existing backers Fidelity Management & Research Company in the US, Taiwan’s Mesh, and South Korea-based Hyundai Motor Group.
Founded in 2016 in Toronto by former AMD executive Ljubisa Bajic (now of Taalas), Tenstorrent builds and sells chips that can be used for AI training and inference. The company also licenses its AI and RISC-V intellectual property (IP) to clients looking to own and customize their silicon. Grim said that Tenstorrent’s business model involves monetizing its tech “every step of the way,” noting that different clients consume its tech differently.
In 2021, Tenstorrent swapped CEOs, bringing on Keller, a renowned chip designer who previously worked at AMD, Apple, Intel, and Tesla, and raised a more than $200-million Series C round at a $1-billion valuation. Last year, Tenstorrent added another $100 million to its coffers.
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According to Grim, Tenstorrent’s open-source software stack differentiates the company from its competitors. He said this approach has helped Tenstorrent sell into the automotive and robotics markets, where buyers typically want to inspect and test every line of code due to the risk associated with developing new products without doing so.
To date, Tenstorrent has amassed approximately $150 million in signed contracts. Grim said they have mostly been IP-related up to this point. “We still have a lot of room to grow our hardware business,” he added.
“[Investors] love the fact that we have traction with the IP business and that we have this hardware business, and that it just lessens the risk,” said Grim. “We’ve got multiple ways to monetize our products.”
Grim said that Tenstorrent has no imminent plans to go public, indicating that it is likely at least a couple of years away from an IPO. “If we can build our hardware business reliably to the level we expect, I think a two-year window to an IPO is reasonable, but we don’t know what the market is in two years, so we just have to play it all by ear,” he added.
Feature image courtesy Tenstorrent.