Frore Systems reaches $1.64B valuation as chip cooling becomes critical for AI infrastructure

Another deep tech chip startup becomes a unicorn: Frore hits $1.64B | TechCrunch

Eight-year-old semiconductor startup Frore Systems has raised a $143 million Series D, led by MVP Ventures, at $1.64 billion valuation, the company announced on Monday. Frore has now raised $340 million total, the company said. Frore doesn't make the chips themselves; it makes liquid cooling systems for them. Founded by two former Qualcomm engineers, the company's tech was initially created to offer air-cooling tech for phones and other small fanless electronics. The company's focus on chips was inspired by Nvidia CEO Jensen Huang, who received a demo of the technology about two years ago, Bloomberg reported. Huang suggested they develop liquid-cooling options, the new must-have for AI chips and systems. So they did, releasing products that work with various Nvidia chips and boards. The company has also developed products for Qualcomm and AMD. AI semiconductors have been a hot area for investment. Other new unicorns in the field include Nvidia competitor Positron, which hit a $1 billion valuation in February; Recursive Intelligence which landed a $4 billion valuation right out of the gate. Eridu just launched, too, with a $200 million Series A round (though it declined to disclose its valuation), to build new AI networking chips. Participating investors in Frore's latest round include Fidelity, Mayfield, Addition, Qualcomm Ventures, and Alumni Ventures, among others.

Fidelity-Backed AI Chip Cooling Company Frore Valued at $1.64 Billion in New Funding

Frore Systems Inc., which makes liquid cooling technology for AI chips, raised $143 million in a funding deal that values the startup at $1.64 billion. The round was led by MVP Ventures and includes investments from Fidelity Management & Research Co., Top Tier, Mayfield Fund and Qualcomm Ventures. The company plans to use the funding to expand its manufacturing operations. Frore was founded eight years ago to focus on air cooling for phones and other devices that lack fans. But the rise of AI computing -- powered by Nvidia Corp.'s graphics processing units, or GPUs -- created new opportunities for cooling technology. Using a flow of liquid to lower the temperature of chips has proven to be an effective way to keep data center equipment from overheating. Various companies offer liquid cooling technology, often taking the form of so-called cold plates, but Frore argues that its product does a better job. The startup designs the channels that conduct liquid coolant in 3-D shapes that are customized for each type of chip. The approach also can cycle coolant through several times. Moreover, the company uses materials that enable its product -- the LiquidJet Nexus tray -- to be thinner and lighter. That makes it easier to stack more of them. Taken together, the capabilities let customers squeeze more performance from their chips or get rid of mechanical chillers, according to the startup. That can save on electricity and equipment costs and require less water. "What we realized is the cold plates that are currently being used in liquid cooling solutions, including by Nvidia, are all based on a very rudimentary technique," said Seshu Madhavapeddy, Frore's chief executive officer. Madhavapeddy and co-founder Suryaprakash Ganti gained experience working at Qualcomm Inc.'s mobile and edge device business, where they developed a new type of fingerprint sensor. At the time, they could tell that thermal challenges -- the heat generated by chips -- were starting to threaten the performance of devices. "There was hardly any attention being paid to it, and it had come to a point where thermal was dictating how much performance you are going to get," Madhavapeddy said. To address the problem, Frore started out with a component called AirJet that can be put into devices and double their performance, he said. A little more than two years ago, the company was demonstrating its technology for Nvidia Chief Executive Officer Jensen Huang. "Jensen said, 'Hey you should take this stuff and figure out how to go liquid because the data center is moving to liquid,' so that's where the inspiration came from," said Navin Chaddha, managing partner at Mayfield. His firm provided early funding for the startup years ago and took Frore, along with some other Mayfield companies, to the meeting with Huang. The San Jose, California-based company currently manufactures its products in Taiwan and wants to expand capacity and add locations. Madhavapeddy said that Frore sells to the large cloud providers, countries working on sovereign networks and hardware manufacturers that build server racks. He declined to name customers.

Frore Systems scores $143M in funding at a $1.64B valuation to help AI chips run cooler - SiliconANGLE

Frore Systems scores $143M in funding at a $1.64B valuation to help AI chips run cooler Silicon Valley-based chip cooling startup Frore Systems Inc. has just pulled in $143 million in funding through its Series D round, bringing its total valuation to $1.64 billion. Today's round was led by MVP Ventures and saw participation from a host of other backers, including Fidelity Management & Research, Top Tier, Mayfield Fund and Qualcomm Ventures. The round comes at a time when the data center industry is experiencing tremendous growth as enterprises and hyperscalers race to grow their infrastructure stacks to support artificial intelligence workloads. AI chips are known for quickly becoming too hot to handle, for they generate extreme heat, which makes them less efficient and erodes their compute performance. Cooling chips has become a major concern, and Frore has developed an extremely clever solution that can be used in almost any kind of device. Founded around eight years ago by former Qualcomm Inc. engineers Sesh Madhavapeddy and Surya Ganti, Frore was initially focused on developing cooling technology for small devices such as smartphones and tablets, which lack the traditional fans used in laptops and data center servers. But with the rapid growth of AI computing, Frore has stumbled onto a much bigger opportunity for its advanced cooling technology. The company realized this about two years ago when its founders were contacted by Nvidia Corp. Chief Executive Jensen Huang, who had just seen a demo of the tech, Bloomberg reported. Huang told them that they ought to expand their liquid-cooling solution to support not only small devices, but also chips such as graphics processing units. The founders immediately set about doing so, creating a series of products that work with Nvidia chips and boards, as well as those sold by other chipmakers, like Qualcomm and Advanced Micro Devices Inc. Data center hardware is now Frore's biggest opportunity. Its newest product is called the LiquidJet Nexus tray, which circulates a special coolant liquid through specially designed channels that flow around the processors in data center racks, removing heat from them more efficiently. Madhavapeddy said cooling has become the single greatest limitation in AI chip performance. "Traditional thermal technologies cannot keep pace with the AI revolution," he insisted. "Frore's advanced cooling platforms remove that barrier." Unlike classic liquid cooling systems that rely on flat "cold plates," Frore's technology is based on more flexible, three-dimensional channels that are customized for different types of chips. This approach enables the liquid coolant to flow through the system multiple times and dissipate more heat from the chips than standard systems. The startup also uses materials that are lighter and thinner than those used in traditional data center cooling systems, which means that more units can be stacked inside each server. As a result, it enables AI-focused data center server racks to run much cooler, reducing their electricity use and increasing their performance. By avoiding the use of fans, it also helps to keep servers free of dust. Andre de Baubigny of MVP Ventures said AI infrastructure is being built out at such enormous scales that it's putting huge demands on other elements of data centers, with thermal architecture coming under the most stress. "Frore has built a breakthrough platform that unlocks higher compute density and efficiency across both hyperscale data centers and edge environments," he said. "We believe thermal innovation will be a foundational layer of the AI infrastructure buildout." Frore said it will use the capital from today's round to expand its manufacturing capacity and build more of its cooling systems to meet rising demand for the technology. It currently manufactures its products exclusively in Taiwan, but wants to expand to additional locations. Its customers are said to include large cloud infrastructure providers, large enterprises building their own data centers and governments developing national computing networks, though it declined to name any.