Artificial intelligence chipmaker Tenstorrent Holdings Inc. has raised $1.5 billion USD in fresh capital, pushing the Toronto-founded company’s valuation to $6.2 billion USD. The financing round aims to scale up manufacturing of the company’s Galaxy servers as it works to challenge industry giant Nvidia Corp. in the competitive AI hardware market.
Tenstorrent closed its Series E funding round with backing from a broad syndicate of investors, according to reports. Los Angeles-based Trace Capital, founded by former National Football League linebacker Ben Mahdavi, and New York’s Innovation X LLC led the transaction. Additional financial participants include ARK Invest led by Cathie Wood, Fidelity Management & Research Co., Morgan Stanley, T. Rowe Price, Cadence Venture Capital, Maverick Silicon, Eclipse Venture Equity, Protagonist Management LLC, Agostinelli Group, and Sandisk Corp.
The latest valuation marks a substantial jump for the firm, more than doubling the $2.6 billion valuation it reached following a nearly $700-million Series D round in late 2024. Earlier backers of the chipmaker include Amazon founder Jeff Bezos, Export Development Canada, the Healthcare of Ontario Pension Plan, South Korea’s AFW Partners, Samsung Securities, Hyundai Motor Group, and LG Electronics. Meanwhile, Montreal-based Real Ventures liquidated its stake last year, securing a complete return on its $88-million third fund.
Targeting Nvidia and the Inference Market
Tenstorrent builds specialized hardware and software configurations designed to handle large artificial intelligence workloads. The company positions its technology to deliver faster speeds than the graphics processing units sold by Nvidia, which currently dominates the market for AI computer chips. While Nvidia’s GPUs handle both model training and inference, several new competitors are tailoring their hardware specifically for inference—the process of running trained AI models to power chatbots, autonomous agents, and video generation.
The firm’s Galaxy-branded hardware is engineered specifically to run open-weight large language models, which compete directly with proprietary offerings from companies like OpenAI and Anthropic. Open-weight models allow developers to freely download and modify model parameters to exercise deeper control over system behavior. In addition to manufacturing its own servers, Tenstorrent licenses its intellectual property to outside clients, including LG and Samsung.
Toronto Roots and US Expansion
Founded 10 years ago in Toronto by Ljubisa Bajic, Ivan Hamer, and Milos Trajkovic—with Bajic having previous experience at Advanced Micro Devices Inc. and Jim Keller serving as chief executive officer—Tenstorrent later shifted its corporate base to the United States. The company relocated to the U.S. in 2023 after Jim Keller took over as chief executive officer, establishing its headquarters in Santa Clara, California. Despite the move, Canada remains a core operational hub.
Toronto houses 200 of the company’s 1,000 total employees, making it one of Tenstorrent’s largest offices. The firm also maintains operations in Silicon Valley; Tokyo; Belgrade, Serbia; and Bangalore, India, while manufacturing certain components at Vexos Canada’s facility in Markham. Earlier this year, reports indicated that U.S. chip makers Intel Corp. and Qualcomm Inc. had explored acquisition bids for Tenstorrent exceeding $5 billion before the company opted to pursue independent growth and scale commercial shipments of its hardware.