Chip Startup Rivos Raises More Than $250 Million to Tap AI Boom

Silicon wafer.

(Bloomberg) — Silicon Valley chip developer Rivos Inc. raised more than $250 million as it works toward bringing out its first product, underscoring the push for new hardware to meet the needs of artificial intelligence.

The Santa Clara, California-based company said Tuesday that Matrix Capital Management is the largest investor in the latest round, with new backers including Intel Capital and Taiwan chip design firm MediaTek Inc. participating.

Rivos is betting on demand from AI users that don’t need the costliest and most powerful chips from the likes of Nvidia Corp. to run their services. The company targets customers using data analytics and generative AI, seeking to capitalize on the rising popularity of AI following the advent of ChatGPT.

“We can target potentially smaller installations where Nvidia might seem like an overkill from a cost perspective,” Rivos co-founder and Chief Executive Officer Puneet Kumar said in an interview. “We can go in with a solution that works well enough and can compete quite well.”

Rivos’s chip uses the open-standard RISC-V, a design competing with Arm Holdings Plc, Kumar said. He declined to give details of its chip structure, timeline for product releases, or the startup’s valuation.

The company plans to use the fresh funds to pilot produce chips using Taiwan Semiconductor Manufacturing Co.’s 3NE process technology, among the most advanced in mass production. TSMC’s strategic partner VentureTech Alliance was an existing investor in Rivos and took part in the latest round, along with Walden Catalyst, Dell Technologies Capital, and Koch Disruptive Technologies.

Lip-Bu Tan, the founding chairman of Rivos and early backer, said RISC-V has strong long-term potential especially in data analytics and generative AI applications. Tan, the former chairman and CEO of chip design software company Cadence Design Systems Inc., has been an investor in several key chip startups sold to Amazon.com Inc., Qualcomm Inc., and Intel Corp. He is on the board of Intel.

Kumar was previously part of the team at P.A. Semi Inc., a chip design firm acquired by Apple Inc. as the iPhone maker started to make its own chips. He started Rivos in 2021. Apple sued Rivos in 2022, claiming trade secret theft. Rivos sued back, saying the tech giant forces employees to sign restrictive agreements that prevent them from working elsewhere, stifling up-and-coming companies.

In February, Apple said it reached an agreement to settle the case, paving the way for the new funding round.

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