Tenstorrent has raised $1.5 billion at a $6.2 billion valuation, more than doubling its previous mark. The chip startup chose independence over acquisition talks with Intel and Qualcomm.
Tenstorrent, a chip startup focused on inference, has raised $1.5 billion at a $6.2 billion valuation. The round comes five months after the 10-year-old Nvidia challenger reportedly received acquisition interest from Intel and Qualcomm at valuations of as much as $5 billion.
The fresh round more than doubled Tenstorrent’s valuation from the $2.6 billion it fetched in late 2024. The financing was led by Trace Capital, a new firm launched by Quiet Capital co-founder Ben Mahdavi, and Innovation X. Other backers included Cadence Ventures, Eclipse, Fidelity, SanDisk, and T. Rowe Price. According to BigGo Finance, additional participants included ARK Invest, Morgan Stanley, and Tether Investments.
The company is based in Santa Clara, California, and was founded in 2016 by three former AMD staffers: Ljubisa Bajic, Milos Trajkovic, and Ivan Hamer. Jim Keller, a prominent microprocessor engineer and Tenstorrent CEO, has product work history at AMD and Apple, as well as stints at Intel and Tesla.
Tenstorrent held preliminary takeover talks with Intel Corp. and Qualcomm Inc. earlier in 2026 while also courting investors, according to Bloomberg. Management ultimately chose to expand on its own after a May demonstration in which its Galaxy servers ran high-performance models built by Chinese AI developer DeepSeek.
Jim Keller told Bloomberg that the company decided to remain independent and raise more capital after it showed that its Galaxy servers could run DeepSeek models. "When we had the financing conditions, showed product performance and started shipping, investor interest came," Keller said in an interview, adding that many investors, and he himself, believe the company still has substantial room to grow and that realizing it would deliver the best return for backers and employees.
The new capital will go toward scaling chips tailored for serving open-weight AI models and video generation. Tenstorrent plans to scale production of Galaxy servers, which bundle dozens of its AI chips to run workloads such as chatbots, coding assistants and video generators. Its chips and software are built on RISC-V, the open-source instruction set that lets designers build processors without licensing fees and reduces reliance on proprietary ecosystems such as Arm's.
Tenstorrent is part of a wave of AI hardware startups trying to chip away at Nvidia’s dominance. Among them is Etched, an AI chip maker that was fielding investment offers at valuations of $40 billion or more, TechCrunch reported earlier this month. With 1,150 employees, Tenstorrent says it can tailor hardware and software to individual customers.
"People ask, how do you become a $10 billion company? The answer is starting at $10 million, then $100 million, then $500 million. Our mission is organic growth, staying close to customers and finding ways to serve them well," Keller said.
The valuation jump underscores that investor appetite for alternative silicon architectures remains strong even as public markets scrutinize AI spending more closely. A $6.2 billion mark puts Tenstorrent among the more valuable private chip designers outside the incumbent camp. The participation of strategic investors such as SanDisk and Cadence signals interest from companies that could become suppliers or partners. For the broader AI hardware supply chain, the deal is a reminder that capital is still flowing to challengers positioning themselves on cost and customization rather than raw performance leadership.
Sources
This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.
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