Sam Altman seeks investment for potential chipmaking rival to NVIDIA
What's the story
OpenAI CEO Sam Altman is on the lookout for investors to build an upcoming competitor to NVIDIA, the famous chipmaking giant. The development comes as NVIDIA deepens its business ties with Elon Musk. Altman is promoting a $150 million financing round for Rain AI, a young high-performance semiconductor manufacturer, that would value it at around $600 million.
Investment history
Altman's previous investment and Rain AI's potential
Notably, Altman has a history of supporting Rain AI. He had invested heavily in the company's $25 million seed round in 2022. The next funding round is scheduled to start next month. "He has introduced the company to all his investors for this series B round," an insider said to the New York Post.
Company growth
Rain AI's claims and new hire
Rain AI claims that its processors are much more energy-efficient and powerful than those made by NVIDIA. In a strategic move to strengthen its hardware engineering team, the firm hired former Apple chip executive Jean-Didier Allegrucci as head of hardware engineering in June.
Market scenario
Altman's strategy amid NVIDIA's market dominance
Altman's promotion of Rain AI comes at a time when Musk is in talks with NVIDIA for a possible investment in his xAI project. Despite boasting an incredible 85% market share in the AI chip market, and being the world's most valuable firm with a $3.5 trillion market cap (as of November 7), NVIDIA is likely to remain a chip supplier for OpenAI even if it partners with Musk.
Expert opinion
Analyst's view on Rain AI's future
Wedbush Analyst Dan Ives also weighed in on Rain AI's potential. He said, "Rain AI is one of the legitimate players at the table when it comes to the future of AI and chips." He added that there is a lot of buzz around everything Rain AI is doing, and it's the early days of the AI revolution.