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

SiFive, a company founded in 2015 by UC Berkeley engineers who create open source chip designs, has raised a $400 million oversubscribed round, valuing the company at $3.65 billion.

This deal is interesting for many reasons. For one, SiFive’s RISC-V open chip design is based on RISC processors, not Intel’s x86 or ARM, the two dominant types of CPUs that currently feed Nvidia’s GPU computer system AI empire.

Additionally, Nvidia was an investor in this round, along with a long list of VCs, private equity, and hedge funds. The round was led by Atreides Management, founded by former Fidelity investor bigwig Gavin Baker. (Atreides was also a $1 billion investor in Cerebras Systems). Other investors in the round include Apollo Global Management, D1 Capital Partners, Point72 Turion, T. Rowe Price Sutter Hill Ventures and others.

SiFive’s business model is the same as Arm’s in years past – it licenses its chip designs to people who modify them for their needs and does not sell the chips itself. (In March, Arm changed its model when it launched the first manufactured chip, an AI chip it co-developed with Meta with customers including OpenAI, Cerebras, and Cloudflare.)

SiFive stands out in the rarefied air with a chip design that is open, not proprietary, as well as neutral, not dependent on specific customers. In fact, PitchBook estimates that SiFive hasn’t raised any money since March 2022, when it raised $175 million led by Coatue Management at a pre-money valuation of $2.33 billion. Intel Capital, Qualcomm Ventures, Aramco Ventures, were part of that period.

RISC-V was, until recently, known as a chip for smaller uses such as embedded systems. But with this cash and Nvidia’s attention, SiFive is moving into CPUs for AI data centers. SiFive’s designs will work with Nvidia’s CUDA software and its NVLink Fusion, a rack server system that lets different CPUs plug into Nvidia’s “AI Factory.”

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