By Anna Tong
Positron, a startup chip maker that aims to compete with Nvidia, said Tuesday it raised $23.5 million to scale production of its U.S.-made artificial intelligence chips.
Valor Equity Partners, known for backing Elon Musk’s companies, Atreides Management, Flume Ventures and Resilience Reserve were among the investors who participated in the round.
Reno-based Positron says its chips, which are manufactured in Arizona, use less than a third of the power of Nvidia’s top-of-the-line H100 graphical processing units, while maintaining the same performance.
Positron’s chips are intended for inference, the period when an AI model is being used, rather than for training AI models. At the moment, demand is higher for training chips, but analysts have predicted the need for inference chips could surpass them as more AI applications are deployed.
Generative AI model makers such as OpenAI, Google and Meta have said they will invest heavily in AI infrastructure.
Meta has said it will spend up to $65 billion this year, while Microsoft has said it will spend $80 billion. OpenAI announced a $500 billion Stargate infrastructure program last month.
Currently, Nvidia’s chips have a market share of roughly 80%, but rising costs and concern about depending on a single supplier have led customers such as Microsoft, Meta and OpenAI to explore in-house or external alternatives.
(Reporting by Anna Tong in San Francisco; Editing by Kate Mayberry)
