AI chip startup Axelera AI raises $68 million to challenge Nvidia

Axelera AI offers AI chips that are reportedly 10 times more energy-efficient and five times cheaper than their competitors. With over 180 employees and a project pipeline exceeding $100 million, Axelera AI is positioning itself as a key player in Europe’s push for technological autonomy in AI. The funding will enable expansion into new regions and sectors, including industrial robotics, agriculture, and autonomous vehicles.

The latest funding round, a significant milestone for Axelera AI, saw participation from both existing and new investors. Notable backers include Innovation Industries, Invest-NL, and Verve Ventures. New participants, such as the European Innovation Council and a Samsung Electronics investment fund, have also joined the ranks. This influx of capital is set to drive Axelera AI’s expansion into North America, Europe, and the Middle East.

The battle for AI dominance

Axelera AI is positioning itself as a formidable contender against Nvidia, the current leader in AI chips. Co-founder and CEO Fabrizio Del Maffeo confidently told the Financieele Dagblad that Axelera’s technology is significantly more energy-efficient and cost-effective than Nvidia’s. This efficiency is crucial as AI applications continue to grow and consume increasing amounts of power. Axelera’s chips are designed for generative AI, capable of producing content autonomously, thus opening up new avenues for technological advancement.

The Thetis core chip

Central to Axelera AI’s innovation is the Thetis Core chip, which can perform an astounding 260,000 calculations in one cycle, compared to the 16 or 32 calculations typical computers can manage. This capability makes it highly suitable for AI neural network calculations, predominantly vector-matrix multiplications. Their chip offers high performance and usability at a fraction of the cost of existing market solutions. This could democratize AI, making it accessible to a broader range of applications and users.

The company’s ambition is not just limited to chip development. Axelera AI aims to spread its technology globally, making AI more prevalent in everyday applications. Their vision includes creating a safer and greener world by leveraging AI to enhance efficiency and reduce energy consumption. With the new funding, Axelera AI is poised to deliver on its promise of making high-performance AI accessible to hardware product designers and engineers across various industries.

Navigating challenges and opportunities

The journey to secure funding has not been without its challenges. Despite raising $120 million in less than three years, Axelera AI acknowledges that this is just a drop in the ocean compared to the market’s potential. The company had to navigate complex negotiations with multiple institutional investors, ultimately deciding to close the current round and immediately open a new one to capitalize on the high interest. This strategic move aims to avoid prolonged negotiations and ensure continuous financial support for their ambitious projects.