Nvidia-backed SiFive open AI chip reaches $3.65 billion valuation

Founded in 2015 by UC Berkeley engineers who developed an open-source chip design, SiFive received $400 million in oversubscribed funding and an enterprise value of $3.65 billion.

This deal is interesting for a number of reasons. First, SiFive’s RISC-V open chip design is based on RISC processors rather than Intel’s x86 or ARM, the two main types of CPUs currently powering Nvidia’s GPU computer system AI empire.

NVIDIA was also an investor in this round, joining a long list of VCs, private equity, and hedge funds. The round was led by Atreides Management, founded by former Fidelity investor mogul Gavin Baker. (Atreides was also an investor in Cerebra Systems’ $1 billion round). Other investors in this round include Apollo Global Management, D1 Capital Partners, Point72 Turion, and T. Rowe Price Sutter Hill Ventures.

SiFive’s business model is like the old Arm. The company licenses its chip designs to people who modify them to suit their own needs, and does not sell the chips themselves. (In March, Arm changed its model when it launched its AI chip, its first-ever chip developed at Meta with customers including OpenAI, Cerebras, and Cloudflare.)

SiFive is in an extremely tough spot with its open, non-proprietary, and customer-neutral chip design. In fact, according to Pitchbook estimates, SiFive hasn’t raised any funding since March 2022, when it raised $175 million led by Coatue Management at a pre-funding valuation of $2.33 billion. Intel Capital, Qualcomm Ventures, and Aramco Ventures participated in the round.

Until recently, RISC-V was best known as a chip for small-scale applications such as embedded systems. But with this funding and Nvidia’s attention, SiFive is moving into CPUs for AI data centers. SiFive’s design runs on Nvidia’s CUDA software and NVLink Fusion, a rack server system that allows you to connect a variety of CPUs to Nvidia’s “AI factory.”

In other words, as rivals Intel and AMD try to compete with Nvidia’s GPUs, Nvidia is backing an 11-year-old startup that can design CPUs with open and completely alternative technologies.