Challenging Nvidia in AI chips is a bit like opening a burger stand across from a McDonald's that also owns the cows, the buns and the street. Tenstorrent just raised $1.5 billion to try it anyway, and its pitch is that the street should belong to everyone.

A $6.2 Billion Bet on RISC-V

Santa Clara-based Tenstorrent announced a $1.5 billion Series E on October 19 at a $6.2 billion valuation, more than doubling the roughly $2.6 billion mark from its December 2024 round. Trace Capital and Innovation X led, with ARK Invest, Fidelity, Morgan Stanley, T. Rowe Price, SanDisk and others joining in. The company plans to use the cash to scale deployment of its Galaxy servers, which combine multiple AI processors to run large language models, coding assistants and video generation.

Tenstorrent's processors are built on RISC-V, an open instruction set that avoids architecture licensing fees, and paired with an open-source software stack. It also licenses its TT-Ascalon RISC-V CPU and Tensix AI cores to companies designing their own silicon, with Samsung and LG named as customers. Its CEO, a chip-design veteran whose résumé includes AMD's Zen architecture, early Apple A-series chips and Tesla's self-driving silicon, summed up the strategy neatly: "We built one architecture and sell it at every size."

The Real Moat Is Software, Not Silicon

Here's the dirty secret about beating Nvidia: the hardware is the easier part. Nvidia's fortress is CUDA, the software ecosystem developers already know and most AI tooling assumes. Tenstorrent's open stack is a direct swing at that lock-in, or as the CEO put it, "The future of compute is open, scalable, and owned by the people building on it."

The sober take: money buys runway, not market share. Tenstorrent still has to prove it can match Nvidia on performance, cost, software compatibility and plain old availability at commercial scale, then coax developers out of a very comfortable ecosystem. But with AI compute bills eating budgets alive, a credible open alternative is good news even for people who'll never buy a Tenstorrent chip, because competition has a way of making the incumbent's prices a little less heroic.

Nvidia isn't sweating yet. But somebody in Santa Clara just bought a very expensive gym membership.

Whichever silicon wins the AI chip wars, the smart move for businesses is AI integrations that aren't welded to a single vendor, which is exactly how our team builds them, so let's talk about keeping your options open.

Source: Tech Startups