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AI Chip Market
Which AI Chip startups are poised to lead the $400 billion dollar market opportunity?
Jul 8, 2024
If you missed out investing in NVIDIA, don’t worry. We’ve got you covered with a list of the next big startups disrupting the chip market.
The global AI chip is projected to become a $400 billion industry in the next few years. With the rise of AI and the increasing demand for chips that have the power to train and run these AI models on them, you’ll be glad to hear that Nvidia will not be the only player in the market.
We’ve covered 10 startups we think can fill in the gaps where Nvidia can’t, and grab a piece of this growing pie.
Here are our top 10 picks that you should keep your eye out for in 2024:
Etched: AI accelerator chips for LLMs.
Total Funding: $125.3M
YoY Headcount Growth: 707.32%
Job Openings: 7
Tenstorrent: AI processors for scalable and efficient deep learning training.
Total Funding: $334.5M
YoY Headcount Growth: 47.87%
Job Openings: 0
Axelera: High-performance AI hardware for edge computing.
Total Funding: $125M
YoY Headcount Growth: 44.68%
Job Openings: 4
Recogni: AI chips for autonomous vehicles and computing applications.
Total Funding: $176M
YoY Headcount Growth: 40.22%
Job Openings: 15
Groq: LPU (Language Processing Unit) Inference Engine for AI.
Total Funding: $362.5M
YoY Headcount Growth: 34.54%
Job Openings: 2
SambaNova Systems: AI hardware and integrated software platforms for large scale and ML use.
Total Funding: $1.1B
YoY Headcount Growth: 30.25%
Job Openings: 48
Celestial AI: Optical computing technology for AI.
Total Funding: $338.8M
YoY Headcount Growth: Data not available
Cerebras Systems: Ultra-large AI processors.
Total Funding: $715M
YoY Headcount Growth: 8.46%
Job Openings: 5
D-Matrix: Efficient generative AI compute platforms.
Total Funding: $154M
YoY Headcount Growth: Data not available
Job Openings: 13
Lightmatter: Photonic computing chips for AI.
Total Funding: $422M
YoY Headcount Growth: 41.63%
Job Openings: 7
You simply cannot compete with Nvidia who own 88% of the market share without some cash to burn. So, let’s take a look at the most funded amongst these startups:
Sambanova Systems and Cerebras Systems are two of the oldest AI Chip startups in this list, started in 2017 and 2016 respectively. This explains their exponentially high funding as compared to the newer startups such as DMatrix, Etched and Axelera.
In fact, Etched and Axelera have very recently raised huge funding rounds last week - $120 million and $68 million respectively. The newer generation of AI Chip startups are here and they are expanding rapidly. Let’s take a look at how fast they are growing:
Although the older startups have raised more, the newer startups are expanding rapidly to compete in this space. With the exception of TensTorrent, the top 4 fastest growing startups have all been started in the last 5 years, indicating the rise of newer names may be unstoppable in this highly competitive sector.
To give you a better sense of their growth, here are graphs that show the exact number of employees over the last two years:
Companies securing significant funding, such as Tenstorrent, which raised $100 million from Hyundai and Samsung, exhibit rapid employee growth by expanding R&D and operational capacities. This pattern is evident across the industry, as firms with unique technologies, like Lightmatter’s photonic computing, attract substantial investments, driving accelerated growth due to market demand for innovative solutions.
Similarly, newer companies like Etched and Axelera, which have also raised substantial funding, are experiencing massive growth. Etched has shown the fastest percentage growth in employee numbers among the listed companies.
This shows a direct correlation between the funding raised and the rapid expansion of these startups, which brings us to our final graph.
Here, we highlight which of these startups might require funding to support their growth:
Etched AI, with its one-year headcount growth exceeding 700% and a recent funding round in June 2024, is demonstrating strong investor interest and rapid expansion, indicating high potential for further investment.
Similarly, d-Matrix, which achieved a near 100% growth in headcount since its last funding round in September 2023, is rapidly expanding its team, making it another candidate for potential investment.
You might also want to keep an eye out for Axelera and TensTorrent which are showing more than 40% headcount growth in the last year.
With the rising demand for chips and the constant technological advancements being made in this sector, get ready to write some checks for these highly promising startups.
About the data
The data seen above is from Crustdata - the most accurate realtime LinkedIn data source for growth and private equity investors. It indexes billions of public data points on companies every week to provide an edge over the private market.
