Nvidia-backed SiFive hits $3.65 billion valuation for open AI chips

SiFive Secures $400 Million Investment Round, Valued at $3.65 Billion

SiFive, a company established in 2015 by UC Berkeley engineers known for creating an open-source chip design, has successfully closed a $400 million oversubscribed funding round, placing the company’s valuation at $3.65 billion.

The recent investment in SiFive is significant for several reasons. One key aspect is that SiFive’s RISC-V open chip design is based on the RISC processor, distinguishing it from the dominant Intel x86 and ARM CPUs that currently power Nvidia’s GPU computing system for AI applications.

Noteworthy investors in this funding round include Nvidia, along with a diverse group of venture capitalists, private equity firms, and hedge funds. The round was led by Atreides Management, founded by former Fidelity investor Gavin Baker. Other notable investors include Apollo Global Management, D1 Capital Partners, Point72 Turion, T. Rowe Price Sutter Hill Ventures, and more.

SiFive operates on a business model similar to that of Arm in the past, where it licenses its chip designs to be customized by third parties rather than selling the chips directly. This approach contrasts with Arm’s recent shift to manufacturing its own AI chip in collaboration with Meta and customers like OpenAI, Cerebras, and Cloudflare.

SiFive stands out for its open and neutral chip designs, unlike proprietary alternatives, positioning the company as a vendor-agnostic provider. Pitchbook estimates indicate that SiFive’s previous funding round was in March 2022, raising $175 million led by Coatue Management at a pre-money valuation of $2.33 billion. Participants in that round included Intel Capital, Qualcomm Ventures, and Aramco Ventures.

While RISC-V has traditionally been associated with smaller applications such as embedded systems, SiFive’s recent funding influx and collaboration with Nvidia signify a shift towards developing CPUs for AI data centers. SiFive’s designs are compatible with Nvidia’s CUDA software and NVLink Fusion, enabling seamless integration with Nvidia’s AI-focused server infrastructure.

As competitors like Intel and AMD vie for market share against Nvidia’s GPU dominance, Nvidia’s investment in SiFive reflects a strategic alignment with an innovative startup leveraging open-source technology for CPU design.