Tenstorrent Raises $1.5 Billion at $6.2 Billion Valuation to Scale Open-Weight AI Chips

Tenstorrent Secures $1.5 Billion in Series E Funding

Tenstorrent, the AI chip startup led by legendary microprocessor engineer Jim Keller, has closed a $1.5 billion Series E funding round at a $6.2 billion valuation1

1

2

2

. The round was jointly led by Trace Capital, a new firm launched by Quiet Capital co-founder Ben Mahdavi, and Innovation X4

4

. This marks a significant milestone for the 10-year-old company, more than doubling its $2.6 billion valuation from late 20242

2

. New and existing investors participated, including Agostinelli Group, ARK Invest, Cadence Ventures, Eclipse, Fidelity, Morgan Stanley, Protagonist, SanDisk, T. Rowe Price, Tether Investments, Virtu Financial and XTX Markets2

2

5

5

.

Choosing Independence Over Acquisition

The funding round comes five months after Tenstorrent reportedly received acquisition interest from Intel and Qualcomm at valuations as high as $5 billion1

1

. Jim Keller told Bloomberg that the company decided to remain independent and raise more capital instead of selling2

2

. A demonstration in May proved to be a turning point, where Galaxy servers successfully ran high-performance DeepSeek models4

4

. "Once we had the ability to fundraise and demonstrate the performance and started to ship, the investor interest came in," Keller said4

4

. He added that many investors believe there's an opportunity for substantial growth, making independence the best path forward for both investors and employees4

4

.

Scaling Galaxy Servers for Open-Weight AI Models

Tenstorrent will deploy the fresh capital to scale its Galaxy servers globally, which are designed to run open-weight AI models ranging from large language models to video generation workloads2

2

1

1

. The Galaxy servers are enterprise-class systems that can coordinate with others to create massive superclusters for training and running advanced frontier models5

5

. Companies like Virtu Financial already use Galaxy servers to power on-premises AI trading agents, while Equinix makes them available to enterprises through its data center colocation services5

5

. The funds will also support development of AI and CPU designs that Tenstorrent licenses to companies building their own chips, including Samsung and LG2

2

.

Building an Open Compute Ecosystem with RISC-V

Tenstorrent's platform approach centers on RISC-V, an open chip architecture that powers its Tensix Neo accelerators and Ascalon central processing units5

5

. The company publishes its software stack as open source, giving developers flexibility to bring any AI workload to its hardware2

2

. This stack includes TT-Forge, a compiler bridging machine learning frameworks like PyTorch to RISC-V chips; TT-Metalium, a software development kit for hardware optimization; and TT-LLK for low-level kernel optimizations5

5

. "We built one architecture and sell it at every size," Keller explained. "The future of compute is open, scalable, and owned by the people building on it"2

2

5

5

.

Challenging Nvidia's AI Compute Dominance

Tenstorrent positions itself as a competitor to Nvidia, AMD and Broadcom, which dominate the market for AI chips4

4

. Keller told Bloomberg that customers are "looking for alternatives" and want general-purpose AI compute systems capable of running any type of model4

4

. The AI chip startup can compete on price and take orders that may be too small for larger rivals1

1

4

4

. With 1,150 employees across offices in Santa Clara, Austin, Toronto, Belgrade, Tokyo and Bangalore, Tenstorrent can tailor either software or hardware to meet specific customer requirements2

2

4

4

. Constellation Research analyst Holger Mueller noted that "Nvidia is not the only option anymore. More competition and deployment options for AI compute can only be beneficial for enterprises, making AI workloads cheaper and more flexible"5

5

.

Jim Keller's Vision for Organic Growth

Keller's semiconductor pedigree includes designing Apple's A4 and A5 processors, AMD's Zen architecture, and Tesla's Full Self-Driving chip2

2

4

4

. He outlined his growth strategy: "People say, 'How do you grow to be a $10 billion business?' Well, you start with $10 million and $100 million, then $500 million. Our mission is to grow organically and meet the customers where they are and figure out how to service them"4

4

. Protagonist co-founder George Bousis highlighted what sets Tenstorrent apart: "Few companies design the chip and the software that runs on it, but Tenstorrent does both, and its video generation results beat industry benchmarks ahead of our expectations"5

5

. Tenstorrent is part of a growing wave of AI hardware startups challenging established players, joining companies like Etched, which recently fielded investment offers at valuations exceeding $40 billion1

1

.