Altman Raises Funds for Rain AI in Push to Rival Nvidia
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Sam Altman, CEO of OpenAI, backed by Microsoft (MSFT, Financials), is pursuing a $150 million funding round for Rain AI, a semiconductor startup aiming to compete with Nvidia (NVDA, Financials), the New York Post reported, citing a source familiar with the matter.
Rain AI is valued at $600 million in the fundraising round, which follows its $25 million initial round in 2022 when Altman was a major investor.
Next month is likely to bring the second investment round. Emphasizing Rain AI's emphasis on energy-efficient and high-performance semiconductors, a source said Altman has apparently presented the potential to OpenAI investors.
Established as a competitor in the artificial intelligence hardware market, Rain AI recently hired former Apple executive Jean-Didier Allegrucci to oversee its hardware engineering initiatives. With an estimated 85% share, the business says its chips are more energy-efficient than those of Nvidia, which rules the artificial intelligence chip industry.
Altman's efforts coincide with Nvidia's strengthening of ties with Elon Musk, who intends to buy 100,000 Nvidia processors for xAI and other AI endeavors. Given these advancements, Nvidia is anticipated to keep providing OpenAI with processors.
Rain AI is one of the legitimate players at the table when it comes to the future of AI and chips, Dan Ives, an analyst at Wedbush, said. Theres a lot of buzz around everything Rain AI is doing and its the early days of the AI revolution. Theres going to be many players, not just the Godfather of AI Jensen Huang and Nvidia.
This article first appeared on GuruFocus.