Tenstorrent raises $1.5B to stay independent and expand Galaxy servers for open AI models

Tenstorrent, an artificial intelligence chip company led by Jim Keller, has secured $1.5 billion in new funding to expand its operations while remaining an independent business. The company announced the closure of this Series E round on Monday, establishing a post-money valuation of $6.2 billion. Trace Capital and Innovation X led the investment, joining a group of new and existing backers. Investors include Agostinelli Group, ARK Invest, Cadence Ventures, Eclipse, Fidelity, Maverick Silicon, Morgan Stanley, Protagonist, SanDisk, T. Rowe Price, Tether Investments, Virtu Financial, and XTX Markets.

In plain English

This funding round significantly increases the company’s financial value compared to previous assessments. Bloomberg reported that Tenstorrent was valued at $2.6 billion after its last funding round in 2024, meaning the new valuation is more than double the previous figure. The capital injection allows the firm to grow its infrastructure without being absorbed by a larger corporation. Tenstorrent plans to use the money to deploy its Galaxy servers at a larger scale. These servers are designed to run open-weight models, which include large language models and video generation tools.

The background

Earlier this year, Tenstorrent engaged in discussions with major technology firms regarding a potential acquisition. Bloomberg reported that the company held talks with Intel and Qualcomm in May about a possible takeover. At that time, reports suggested valuations of up to $5 billion were on the table. CEO Jim Keller told Bloomberg that Tenstorrent decided to raise capital independently instead of selling the company. He cited a successful demonstration in May as a turning point, where Galaxy servers ran high-performance models from DeepSeek. Keller stated that the company can compete on price and accept orders that might be too small for larger rivals.

What changes now

Tenstorrent will focus on developing AI and CPU designs it licenses to other companies, including Samsung and LG. The firm sells hardware ranging from single cards and workstations to racks, superclusters, and custom designs. Its processors utilize RISC-V, an open chip architecture, and the company publishes its software stack as open source. Tenstorrent currently employs 1,150 people across offices in Santa Clara, Austin, Toronto, Belgrade, Tokyo, and Bangalore. The company describes Keller as the architect behind Apple’s A4 and A5 chips, AMD’s Zen processors, and Tesla’s Full Self-Driving chip.

Key terms explained

Open-weight models are artificial intelligence systems where the underlying data and parameters are publicly available, allowing developers to run them on various hardware. This contrasts with closed APIs where users cannot see or modify the model. RISC-V is an open-source instruction set architecture for processors, meaning companies can design chips without paying licensing fees to a single vendor. Independence in this context means the company retains control over its product roadmap and corporate decisions, rather than aligning with the strategic goals of a parent corporation.

What to do and how to stay safe: Tenstorrent

• Monitor vendor announcements regarding hardware compatibility for open-weight AI models to ensure your infrastructure can support new chip architectures.
• Evaluate the cost-performance ratio of emerging AI chip providers against established vendors when planning future compute capacity expansions.
• Review licensing terms for any proprietary software stacks if you are integrating new hardware that relies on open-source components.
• Assess your organization’s reliance on closed API providers and consider diversifying with open-weight models to reduce vendor lock-in risks.

Step-by-step guide: Stop AI Chatbots Leaking Sensitive Business Data

General security guidance from the Vector Update newsroom. It is not confirmed advice from the organisations named in this story.

Frequently asked questions

Why did Tenstorrent decide not to sell to Intel or Qualcomm?

CEO Jim Keller stated the company chose to raise money independently after demonstrating that its Galaxy servers could successfully run high-performance DeepSeek models.

What is the new valuation of Tenstorrent?

Tenstorrent closed its Series E round at a post-money valuation of $6.2 billion, which is more than double its previous valuation of $2.6 billion.

Who led the latest funding round for Tenstorrent?

Trace Capital and Innovation X led the $1.5 billion Series E funding round for Tenstorrent.