Silicon Valley-based artificial intelligence chip startup d-Matrix has successfully raised US$110 million in funding, featuring support from Microsoft Corp (MSFT.O). This achievement comes amidst a challenging environment for many chip companies seeking financial backing.
Nvidia’s (NVDA.O) dominant position in the AI chip market, owing to its formidable combination of hardware and software, has deterred potential investors in some emerging startups, as per sources interviewed by Reuters. Nvidia declined to comment on the matter.
The Series B funding round was spearheaded by Singapore-based Temasek and included participation from Palo Alto, California-based venture firm Playground Global and Microsoft.
AI chip startup d-Matrix’s CEO, Sid Sheth, expressed enthusiasm about the investment, stating, “This is capital that understands what it takes to build a semiconductor business. They’ve done it in the past. This is capital that can stay with us for the long term”.
Sheth revealed that the fundraising process commenced approximately a year ago but did not disclose the company’s valuation. d-Matrix had previously secured US$44 million in funding.
The company specializes in designing chips optimized to bolster generative AI applications, such as ChatGPT. Its chip designs incorporate digital “in-memory compute” technology, enhancing the efficiency of AI code execution.
One of the key advantages of d-Matrix’s chip technology is its energy-efficient data processing for generative AI responses, making it particularly well-suited for such tasks. Notably, d-Matrix’s focus lies in the “inference” phase of AI processing and does not compete with Nvidia in developing technology for training large AI models.
Playground partner Sasha Ostojic emphasized the unique strengths of d-Matrix, saying, “We have solved the computer architecture. We have solved the low power requirements and the needs of a data center—(we) built a software stack to deliver the lowest latency in the industry by orders of magnitude.”
Microsoft has shown interest in evaluating d-Matrix’s chip technology for its own use when it becomes available next year, as stated by Sheth.
AI chip startup d-Matrix anticipates earning less than US$10 million in revenue for the current year, primarily from chip sales to customers evaluating its technology. The company has ambitious projections, aiming to generate between US$70 million and US$75 million in annual revenue within two years, with the goal of breaking even, according to Sheth.
