Tenstorrent raised $1.5 billion in a Series E funding round that values the AI chip startup at $6.2 billion, according to Bloomberg. The figures come from a statement the company gave to Bloomberg.
Trace Capital, which Ben Mahdavi, a Quiet Capital co-founder, launched earlier this year, headed the round together with Innovation X $TWTR. Agostinelli Group, Sandisk, Tether Investments, T. Rowe Price $TROW Group and Cadence $CDNS Ventures, the venture arm of Cadence Design Systems, also took part. Existing investors Ark Invest and Fidelity participated as well.
The new valuation is more than double the $2.6 billion Tenstorrent was worth in its previous funding round in 2024.
Tenstorrent drew takeover interest earlier this year, according to Bloomberg. The company spoke with Intel $INTC, Qualcomm $QCOM and other industry players about a possible sale, even as it pursued new backers for its fundraising.
Tenstorrent CEO Jim Keller told Bloomberg the company opted to bring in new funding rather than sell itself. He said a demonstration in May proved the company's Galaxy servers were capable of handling powerful DeepSeek AI models, and he called it a turning point.
"Once we had the ability to fundraise and demonstrate the performance and started to ship, the investor interest came in," Keller said, according to Bloomberg. "Many of our investors and I personally think there's an opportunity to grow quite a bit. I think that's the best return for the investor and the employees."
Tenstorrent builds processors that, by its own account, handle some AI workloads more efficiently. Its product line extends to computers and software as well, much like that of larger rivals Nvidia $NVDA and Advanced Micro Devices. Nvidia, AMD $AMD and Broadcom $AVGO dominate the market for the chips behind AI software, yet a growing number of startups are trying to compete with them.
“People are looking for alternatives,” Keller said, according to Bloomberg. He added that Tenstorrent can compete on price and that customers want general-purpose AI computers able to run any type of model.
Keller said Tenstorrent serves a wide range of customers and can take on orders that may be too small for larger competitors, according to Bloomberg. It has 1,150 employees and can tailor either its software or its hardware to what a given customer requires.
“People say, ‘How do you grow to be a $10 billion business?’ Well, you start with $10 million and $100 million, then $500 million,” Keller said, according to Bloomberg. “Our mission is to grow organically and meet the customers where they are and figure out how to service them.”
Keller has contributed to chip programs at a number of firms, among them AMD and Apple $AAPL, and his résumé also includes stints at Intel and Tesla $TSLA. Ljubisa Bajic, Milos Trajkovic and Ivan Hamer, all AMD alumni, founded Tenstorrent in 2016.