Hyundai on Tenstorrent: “With this investment, the Group expects to develop optimized but differentiated semiconductor technology that will aid future mobilities.”

Canadian startup Tenstorrent, led by chip industry veteran Jim Keller, announced that it has secured $100 million in funding from Hyundai Motor Group, Samsung’s (KRX: 005930) investment fund, and other investors. Prior to this round, Tenstorrent had already raised $234.5 million and achieved a valuation of $1 billion. The company aims to challenge Nvidia (NASDAQ: NVDA), the leading provider of AI chips for products like ChatGPT.

Jim Keller, known for his work on chips for Apple (NASDAQ: AAPL), Tesla (NASDAQ: TSLA), and Intel (NASDAQ: INTC), took over as Tenstorrent’s CEO earlier this year. In the latest funding round, Tenstorrent secured $30 million from Hyundai (KRX: 005380) and $20 million from Kia (KRX: 000270), while the remaining $50 million was contributed by Samsung’s Catalyst Fund and various other investors, including Fidelity Ventures, Eclipse Ventures, Epiq Capital, and Maverick Capital.

Though Tenstorrent is focused on developing chips for data centers to compete with Nvidia, it also works on AI chips for various applications, such as a recent deal with LG to provide chips for smart televisions.

The funding round was structured as debt that will convert to stock later on, so Tenstorrent’s new valuation will be determined in the next round of equity fundraising, expected to take place next year. Tenstorrent declined to provide specific details about the convertible debt.

While Tenstorrent produces its own AI chips, it also licenses its intellectual property and technology to customers interested in creating their own AI chips. Hyundai, which established a semiconductor development group, plans to utilize Tenstorrent’s technology in future vehicles under its brands Hyundai, Kia, and Genesis.

Heung-soo Kim, executive vice president and head of the global strategy office at Hyundai Motor Group, stated that this investment will help the group develop optimized semiconductor technology to enhance future mobility solutions and strengthen its capabilities in AI technology development.

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