Nvidia-backed SiFive hits $3.65 billion valuation for open AI chips

SiFive, a company founded in 2015 by UC Berkeley engineers who created an open-source chip design, has landed oversubscribed by $400 million round that values ​​the company at $3.65 billion.

This deal is interesting for several reasons. First, SiFive’s RISC-V open-chip design is based on the RISC processor, not Intel’s x86 or ARM, the two main CPU types currently powering Nvidia’s GPU computing system AI empire.

Nvidia was also an investor in this round, along with a long list of VCs, private equity and hedge funds. The round was led by Atreides Management, founded by former Fidelity investor Gavin Baker. (Atreidis was also an investor in Cerebras Systems $1 billion round). Other investors in the round include Apollo Global Management, D1 Capital Partners, Point72 Turion, T. Rowe Price Sutter Hill Ventures and others.

SiFive’s business model is like Arm’s in years past — it licenses its chip designs to those who modify them for their own needs, and doesn’t sell the chips themselves. (In March, Arm changed its model when it released the first chip it made, an AI chip, developed with Meta with customers including OpenAI, Cerebras and Cloudflare.)

SiFive stands in thin air with chip designs that are open, non-proprietary, as well as neutral, not dependent on specific customers. In fact, SiFive hasn’t raised since March 2022, Pitchbook estimates, when it raised $175 million led by Coatue Management at a pre-money valuation of $2.33 billion. Intel Capital, Qualcomm Ventures, Aramco Ventures were part of this round.

RISC-V was, until recently, best known as a chip for smaller uses such as embedded systems. But with that cash and attention from Nvidia, SiFive is moving into CPUs for AI data centers. SiFive designs will work with Nvidia CUDA software and that NVLink Fusiona rack server system that allows different CPUs to connect to Nvidia’s “AI factory.”

In other words, as rivals Intel and AMD seek to compete with Nvidia’s GPU, Nvidia is supporting an 11-year-old startup that can design CPUs on an open and completely alternative technology.