AI Chip Startup d-Matrix Raises $110 Million From Investors

The AI chip startup d-Matrix has raised $110 million from notable investors such as Microsoft. This comes during a time when other chip companies are finding it difficult to raise capital. According to Reuters, this came during the startup’s series B funding round which was led by Singapore-based Temasek.

As mentioned previously, Microsoft was also part of the group of investors along with Playground Global, an early-stage investment firm that seeks to invest in ambitious science and technology-focused startups.

Even though Nvidia still enjoys a dominant position in the AI chip market, much of it due to a powerful combination of hardware and software which has made investors wary of looking toward chipmaking startups, d-Matrix was able to raise considerable capital this round. According to Reuters, Nvidia declined to comment on this series B funding round.

d-Matrix CEO Sid Sheth praised investors who see the future potential of expanding the semiconductor market. While speaking to Reuters, he stated, “This is capital that understands what it takes to build a semiconductor business…They’ve done it in the past. This is capital that can stay with us for the long term.”

The fundraising process for D-Matrix began about a year ago, according to Sheth. The company did not disclose the valuation, and it has previously raised $44 million. d-Matrix designs chips that are optimized to help power generative AI applications such as ChatGPT.

d-Matrix designs the chips with digital “in-memory compute“. This enables AI computer code to run more efficiently. According to the company, its chip technology uses less energy to crunch data required to spit out generative AI responses and is optimized for such tasks.

But what d-Matrix isn’t, is a clone of chipmaking giant Nvidia. The company sets itself apart due to how its technology aims at the “inference” portion of AI processing and does not compete with Nvidia by making technology that trains large AI models.

Sasha Ostojic, partner at Playground who invested in d-Matrix stated, “We have solved the computer architecture,…We have solved the low power requirements and the needs of a data center – (we) built a software stack to deliver the lowest latency in the industry by orders of magnitude.”

OpenAI investor, Microsoft, which has obvious interest in AI-specific chip creation said that it is committed to evaluating the chip for its use when it launches next year. d-Matrix projects that it will receive under $10 million in revenue this year. They expect to generate more than $70 million to $75 million in annual revenue within two years and break even,  according to Sheth.

This comes after a report by Transparency Market Research Inc., which estimates the global market for AI chipsets will see a massive 31.8% CAGR from 2022 to 2031. As AI-powered technology continues to scale, this market grow further.