Intel and Qualcomm lose their shot at Tenstorrent as it raises $1.5 billion at a $6.2 billion valuation

TenstorrentPVT~$2.6B — Tenstorrent, private, latest valuation ~$2.6B closed a $1.5 billion Series E on Monday↗ ¹. The round values the Toronto-founded AI-computer maker at $6.2 billion ¹. Intel▲+3.12% — Intel, up 3.12 percent today and Qualcomm▲+1.39% — Qualcomm, up 1.39 percent today held talks earlier this year to buy it, at prices reported up to $10 billion ². Jim Keller, the designer of Apple's▼−0.16% — Apple, down 0.16 percent today A4 and A5, AMD's▲+2.23% — AMD, up 2.23 percent today Zen and Tesla's▲+3.78% — Tesla, up 3.78 percent today self-driving chip, made the call ³. Growing the company is "the best return for the investor and the employees," he told Bloomberg↗ ⁴. The bet pays off only if Galaxy becomes the standard hardware for running open-weight AI models.

The chips were built for inference, and May showed they work

Tenstorrent's Tensix cores each carry one to two megabytes of their own on-chip memory and reach one another through a direct mesh of hardware routers ². When a model's weights fit inside that pooled memory, inference runs without the slow trips to external memory that a GPU hides by keeping thousands of threads in flight ². The chips are built for that job, answering one user's request to a trained model, rather than for the giant training runs where Nvidia's▲+1.56% — Nvidia, up 1.56 percent today design is strongest ². Galaxy, the server line built on them, reached general availability on April 28↗ ². In May it ran DeepSeek's open-weight models, which anyone can download and modify ⁵, and Keller called the demonstration the turning point: once the company could show performance and ship, "the investor interest came in" ⁴.

The round pays to turn shipped servers into volume production

The money funds volume manufacturing of Galaxy servers, next-generation hardware and licensable chip designs, and hiring ¹. It deepens the bet on RISC-V, the open chip architecture its processors run on, with the software stack published as open source ³. Customers already sit in that middle: the trading firm Virtu Financial runs on-premises AI trading agents on Galaxy servers↗, and Equinix▼−1.23% — Equinix, down 1.23 percent today, a data-center colocation provider, offers them to enterprises ⁶. Samsung and LG license the designs, and the same architecture sells from a $999 card to rack-scale superclusters ¹⁸. The weak link is software: TT-Metalium, the open-source rival to Nvidia's CUDA, makes programmers manage data movement themselves, and independent production-scale benchmarks do not yet exist ².

New investors set the price, and early ones have banked returns

Trace Capital, the Los Angeles firm former NFL linebacker Ben Mahdavi started this year, and New York-based Innovation X led the round ⁵⁷. Fidelity, Morgan Stanley▼−0.81% — Morgan Stanley, down 0.81 percent today, T. Rowe Price▼−0.32% — T. Rowe Price, down 0.32 percent today, Sandisk▲+6.07% — Sandisk, up 6.07 percent today and Tether Investments joined ³⁴. Real Ventures, an early Montreal investor, sold its entire stake last year and made back its whole $88-million fund↗ ⁵. Keller and the employees keep the upside, and the IPO the company began preparing with its 2023 move from Toronto to Santa Clara stays open ¹. Nvidia, past $5 trillion in market value, keeps its grip for now ⁵.

Buyers gain an independent supplier, and one benchmark to wait for

For buyers of AI compute, the result is an independent supplier. Intel and Qualcomm could have bought the alternative; now they have to compete with it. The signal to watch is an independent, production-scale benchmark of TT-Metalium against CUDA, because until one exists the new valuation rests on Tenstorrent's own performance claims ².