AI Chip Startup SambaNova Raises Funds at $11 Billion Valuation

Chip startup SambaNova Systems Inc. has raised $1 billion at an $11 billion valuation, underscoring investors’ conviction in rising demand for infrastructure tied to artificial intelligence.

SambaNova, which is backed by Intel Corp.’s venture arm, has completed the first close of the Series F round led by General Atlantic, the company is set to announce Wednesday.

Along with the funding, the firm has lined up JPMorgan Chase & Co. as a customer, according to a statement reviewed by Bloomberg News. The bank will deploy SambaNova’s chips to power AI workloads in-house.

Founded in 2017 by three former Stanford University students, SambaNova designs custom AI chips aimed to rival those offered by Nvidia Corp. It’s among a group of companies trying to get a foothold in the changing but booming market for AI infrastructure. While Nvidia’s chips dominated the era of training models, data center operators are increasingly shifting toward providing services by chipmakers like SambaNova that use existing software at lower cost and greater efficiency.

Rodrigo Liang, SambaNova’s chief executive officer, said the market is seeing a “hockey stick” effect in customers looking for alternatives to Nvidia for inference while also looking to lower what’s known in the industry as cost-per-token.

SambaNova’s chips are designed to be used alongside Nvidia products, not to replace them. Liang said SambaNova’s SN40 and SN50 chips can run the so-called decode portion of inference — unpacking the query from the model — five to 10 times faster, which helps free up the same number of Nvidia chips for other tasks such as training.

“People still want to buy the same number of tokens — you’re just processing them fast on the same hardware versus standing up 10 times the number of racks to actually keep everybody moving,” Liang said. The company is on track to release its fifth chip.

Martín Escobari, co-president and head of global growth equity at General Atlantic, said in an interview that the industry already recognizes the need for fast inference for big AI models.

“The other big trend that has yet to become mainstream is the desire to in-source AI infrastructure as a means for data privacy and control,” Escobari said. “That will help expand SambaNova’s addressable market further, where the partnership with JPMorgan is the first proof-point of that.”

Intel Talks

The need for talent at the cutting edge of development saw Intel hold talks to acquire SambaNova last year. While Liang declined to comment on those talks, he said SambaNova is “always open” to conversations around “some sort of strategic combination, and, or in some cases, strategic alliances.”

Read More: SambaNova Said to Seek Funding After Intel Takeover Talks Stall

Seligman Ventures, T. Rowe Price Group Inc.and Capital Group also made significant investments in SambaNova’s Series F round, according to the statement. Other new or existing investors in the company include A&E Investment, Assam Ventures, Battery Ventures, BlackRock Inc., Cambium Capital, Intel Capital, Kabila Capital, QFO Capital, Qatar Investment Authority, Vista Equity Partners and Volantis.

SambaNova rival Cerebras Systems Inc., which also designs chips that focus on inference, climbed 68% following its initial public offering earlier this year. While Cerebras has given up much of those gains, its debut could offer SambaNova some pointers in its own potential journey toward the public market.

“We will let the market decide. But with the capital that we’re raising, it gives us a lot of flexibility with that big of a balance sheet,” Liang said. “We’ve got a lot of room to navigate.”