SambaNova raises fresh funding at an $11bn valuation as the Nvidia-alternative trade heats up

SambaNova, an AI chip startup, raised fresh funding at an $11 billion valuation, up from roughly $2 billion earlier this year, as investors race to back alternatives to Nvidia. The company builds chips and systems for running large AI models efficiently, and has raised nearly $1.5 billion from investors including SoftBank, Intel, and BlackRock.

SambaNova has raised fresh funding at an $11bn valuation, according to Bloomberg, capping a run in which the AI chip startup has roughly quintupled its worth in a matter of months. The figure is up from the roughly $10bn valuation reported when the round was first taking shape in late June. The speed of the re-rating is the story here as much as the number. A company valued at around $2bn earlier in the year is now, on paper, worth more than five times that, a swing driven by investors racing to back any credible alternative to Nvidia. That same hunger has propelled rival bets, from Qualcomm’s move on Modular https://thenextweb.com/news/qualcomm-modular-deal-4bn to a scatter of inference-focused startups. SambaNova builds chips and systems designed to run large AI models efficiently, using an architecture it calls a Reconfigurable Dataflow Unit rather than the graphics-derived design Nvidia popularised. Its pitch to customers is lower cost and lower power on the inference workloads that now dominate AI spending. Money has followed the pitch. The company has raised close to $1.5bn over its life from a roster that includes SoftBank’s Vision Fund, Vista Equity Partners, Intel, GV, BlackRock and Temasek. The wider AI chip market is where the enthusiasm comes from. As spending shifts from training models to running them, the cost of inference has become the number that decides whether an AI product makes money, and buyers want more than one company setting the price. Its most recent prior round, a $350m raise, closed only in February, which makes the leap in valuation since then all the sharper. Rounds that used to be spaced a year or more apart are now landing within months as demand for compute outpaces supply. There is an unusual figure at the top of the company. SambaNova’s chairman is Lip-Bu Tan, who is also chief executive of Intel, a tie that links the startup to one of the incumbents it is partly trying to route around. That relationship has already produced hardware. Intel and Foxconn have joined SambaNova to build rackscale AI infrastructure https://thenextweb.com/news/foxconn-intel-sambanova-rackscale-ai , pairing its dataflow chips with the manufacturing muscle needed to ship systems at volume. The backdrop to all of this is a market desperate for options. Nvidia still dominates AI training and much of inference, and its customers, cloud providers and model labs alike, have every incentive to fund a second source. That is why capital keeps flowing to challengers even before they have proven they can take meaningful share. European entrants such as Fractile https://thenextweb.com/news/fractile-220m-inference-chip have drawn similar interest on the same thesis, that inference at scale is too large and too expensive to leave to one supplier. Whether SambaNova can convert a soaring valuation into durable revenue is the open question. Founded roughly nine years ago, it has cycled through pitches from training to enterprise inference as the market has shifted under it. It is not short of company at the front of that queue. A cluster of specialist firms, including Cerebras and Groq, is chasing the same opening, each arguing that its particular design suits the economics of inference better than a general-purpose GPU. A valuation like this also raises the question of an exit. Numbers in the double-digit billions tend to point towards a public listing, and an $11bn private tag is the sort of milestone that usually sharpens talk of an IPO. Neither SambaNova nor its investors have detailed the exact size of the new round or how the proceeds will be spent. What the $11bn tag makes clear is that, for now, the money is betting on the alternatives well ahead of the results. Get the TNW newsletter Get the most important tech news in your inbox each week.