Intel and Qualcomm are reportedly in separate talks to acquire AI chip startup Tenstorrent, a deal that could exceed $5 billion, according to Bloomberg. The move highlights the growing urgency for established chipmakers to secure a foothold in the AI accelerator market.
TL;DR
- Intel and Qualcomm are reportedly in talks to acquire Tenstorrent, a RISC-V-based AI chip startup founded by Jim Keller.
- The potential deal could exceed $5 billion, reflecting the high stakes in the AI chip market.
- Tenstorrent's technology and Keller's expertise make it an attractive target for companies looking to compete with Nvidia.
What happened
Intel and Qualcomm are reportedly in separate acquisition talks with Tenstorrent, an AI chip startup founded by veteran processor designer Jim Keller, according to Bloomberg. The potential deal could value the company above $5 billion. All three companies declined to comment on the reports.
Tenstorrent, which builds AI accelerators on the RISC-V open instruction set architecture, has been in discussions with both Intel and Qualcomm. The company is also pursuing a fresh funding round simultaneously, a strategy designed to maximize its leverage in negotiations.
In August, Tenstorrent closed a Series E funding round valued at approximately $1.29 billion, with investors valuing the company between $5.8 billion and $6.4 billion, according to regulatory filings. This valuation sets a high bar for any potential acquisition.
Why it matters
For Intel, acquiring Tenstorrent would provide a faster path to competing with Nvidia in the AI training and inference hardware market. Intel has struggled to find a credible answer to Nvidia's dominance, and Tenstorrent's RISC-V-based technology could be a game-changer.
Qualcomm's interest in Tenstorrent is driven by a desire to expand into the data center market with an AI accelerator business built on open IP. This would allow Qualcomm to compete without getting into licensing disputes with Arm, which supplies the architecture for its core business.
The high-profile bidding war for Tenstorrent underscores the growing importance of AI accelerators and the willingness of established chipmakers to acquire rather than build their own solutions. This shift could accelerate innovation and competition in the AI chip market.
Key facts
- Tenstorrent is reportedly in acquisition talks with both Intel and Qualcomm, with a potential deal exceeding $5 billion.
- The company closed a Series E funding round in August, valued at approximately $1.29 billion, with a company valuation between $5.8 billion and $6.4 billion.
- Jim Keller, Tenstorrent's CEO, has a distinguished career in processor design, including work at Apple, AMD, Tesla, and Intel.
- Tenstorrent builds its AI accelerators on the RISC-V open instruction set architecture, avoiding licensing fees and x86 baggage.
- Intel's shares jumped as much as 6.4% on the news of the potential acquisition, according to Yahoo Finance.
- Qualcomm was previously linked to a Tenstorrent acquisition in June, with reports suggesting a deal could be worth $8 billion to $10 billion.
- Tenstorrent is pursuing both acquisition talks and a fresh funding round to maximize its leverage in negotiations.
Context
The AI chip market is heating up, with established chipmakers like Intel and Qualcomm looking to acquire startups to catch up with Nvidia's dominance. The high-profile bidding war for Tenstorrent is a clear indication of the strategic importance of AI accelerators.
RISC-V, the open instruction set architecture used by Tenstorrent, is gaining traction as a viable alternative to proprietary architectures like Arm and x86. Its open nature allows for greater flexibility and innovation, making it an attractive option for companies looking to differentiate their AI hardware.
The acquisition of AI startups by established chipmakers is becoming more common as the race to develop competitive AI hardware intensifies. This trend is likely to continue as the demand for AI accelerators grows across various industries.