Nvidia Is Betting Big on a Startup That Could Shake Up AI Chip Design

TLDR

• SiFive raised a $400 million round, valuing the company at $3.65 billion
• Nvidia joined the round alongside Apollo, Point72, T. Rowe Price, and others
• The round was led by Atreides Management
• SiFive licenses open-source RISC-V chip designs and does not sell chips directly
• The company plans to use the funds to build CPU designs for AI data centers

SiFive, a Silicon Valley chip design startup founded in 2015, has closed a $400 million funding round that values the company at $3.65 billion. The round was oversubscribed, meaning demand from investors exceeded the amount the company was seeking.

Atreides Management led the round. Atreides was founded by Gavin Baker, a former Fidelity fund manager. Nvidia also participated, along with Apollo Global Management, Point72, Sutter Hill Ventures, Prosperity 7 Ventures, and accounts advised by T. Rowe Price Investment Management.

SiFive CEO Patrick Little told Reuters he expects this to be the company’s final funding round before an initial public offering, though he gave no timeline for when that might happen.

SiFive does not manufacture or sell chips. Instead, it sells chip blueprints that customers can customize for their own internal designs. Google’s parent company Alphabet is among its existing customers.

What Makes SiFive Different

SiFive’s designs are based on RISC-V, an open chip standard overseen by a nonprofit foundation. Unlike Arm or Intel’s x86 architecture, no single company controls RISC-V. This makes it a neutral option for companies that want flexibility in their chip supply chain.

SiFive had previously raised $175 million in March 2022, led by Coatue Management, at a pre-money valuation of $2.33 billion. Investors in that round included Intel Capital and Qualcomm Ventures.

The chip design licensing market has long been dominated by Arm Holdings. But last month, Arm unveiled its first-ever manufactured chip, an AI chip developed with Meta, with customers including OpenAI and Cloudflare. That move made Arm a potential competitor to its own customers for the first time.

Targeting AI Data Centers

SiFive plans to use the $400 million to develop a CPU design specifically for AI data centers. This is a new direction for the company, which has historically focused on chip designs for embedded systems and smaller use cases.

RISC-V chips have been seen as less mature than Arm or x86 for high-performance computing. But Little said the technology has now reached a point where it can compete at the data center level.

SiFive’s designs are being built to work with Nvidia’s CUDA software stack and its NVLink Fusion system. NVLink Fusion is a rack server platform that allows different CPUs to connect directly into Nvidia’s AI infrastructure.

Nvidia is simultaneously competing with Intel and AMD in the data center CPU market while also backing SiFive, a startup using an entirely different chip architecture.

The data center CPU market is seeing increased competition. Arm entered with a new product last month, Nvidia has its own offering, and Intel has reported demand it cannot fully keep pace with.

SiFive last raised funding in March 2022, making this its first round in four years.

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