Silicon Valley AI chip startup SiMa.ai hooks key investors

This is at least the third investment in U.S. chip startups by VentureTech Alliance in the past month. In May, VentureTech invested when Ayar Labs raised another $25 million and Ethernovia raised another $64 million.

SiMa.ai has so far raised a total of $200 million.

While the AI boom sparked by ChatGPT’s viral success is bringing another round of investments into AI hardware, some startups that raised big funds in previous years are already struggling.

“The over-funding is in the training market and in the data center market,” said Navin Chaddha, managing director of investment firm Mayfield and founder of several chip startups. Chaddha made a personal investment in this latest round.

SiMa.ai makes software and hardware to run AI algorithms on devices like industrial robots, drones, security cameras and eventually self-driving cars. Chaddha said that was a space with a huge market but few competitive companies.

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“(SiMa.ai’s) valuations, even though they’re respectable, they’re not at the historic multi-billion dollar valuations that the datacenter players had at the time,” said Moshe Gavrielov, SiMa.ai’s board member who is also on the board of TSMC. British AI chip unicorn Graphcore’s struggles have been widely reported.

SiMa.ai declined to say what the current valuation is but CEO and founder Krishna Rangasayee said the company, founded in 2018, was already generating revenue and over 50 customers were testing its chips.

Rangasayee also pointed to one recent benchmark testing result by SiMa.ai that beat AI chip giant Nvidia Corp in performance and power of chips used on devices like cameras, drones and robots. The testing data is published by MLCommons, an engineering consortium that maintains testing benchmarks widely used in the AI chip industry. “To me, it’s a David versus Goliath. In reality, Nvidia is the primary competitor for us and…we are better than them in performance and in power,” said Rangasayee.