At a time when many chip startups are finding it difficult to secure capital, the Silicon Valley-based artificial intelligence semiconductor startup d-Matrix has raised $110 million from investors that include Microsoft Corp.
The news comes as Nvidia‘s monopoly on the AI chip market as a result of a formidable combination of hardware and software has scared off potential investors in certain companies. Microsoft and Palo Alto venture capital firm Playground Global were also a part of the Series B fundraising round, which was headed by Temasek of Singapore.
According to CEO Sid Sheth, the Santa Clara firm began its fundraising campaign about a year ago. The company has already raised $44 million, but did not disclose the valuation.
D-Matrix creates chips that are well-suited to power generative AI applications like ChatGPT. The business incorporates digital in-memory compute into the chips’ design so that AI computer programmes can operate more effectively. The company’s chip technology consumes less energy when processing the data needed to generate AI responses.
D-Matrix differentiates itself from Nvidia in part because it does not compete with Nvidia by developing technology that trains large AI models. Instead, it focuses on the “inference” portion of AI processing. According to Sheth, when the chip debuts early next year, Microsoft has committed to testing it for its own purposes.
D-Matrix forecasts sales of less than $10 million this year, primarily from customers that buy chips for testing. The company anticipates revenue of between $70 million and $75 million.