NVIDIA’s Rival Raises a New Round of Funding, Reaches Valuation of Over $400 Mn

South Korean artificial intelligence chip-making startup 'Sapeon' is raising a funding round that puts its valuation above $400 million. Headquartered in California, Sapeon enables “next-generation AI computing” and solutions. The company designs AI semiconductors for data centres and AI chips for applications. The $400 million valuation will give the much-needed impetus to take on its biggest rival, NVIDIA, the market giants of semiconductors. 

Sapeon’s parent company, SK Telecom Communications, is one of South Korea’s biggest telecommunication operators. CEO of Sapeon, Soojung Ryu, said that the AI semiconductor market is set to cross over $100 billion by 2026. She also believes that with the evolution of AI services like ChatGPT, AI solutions will grow. 

Sapeon has been using their chips in their own “neural processing unit farms” which are computer systems for AI applications. They have also sold their services to cloud service provider, NHN Cloud , and semiconductor company, SK Hynix. Since its inception in 2022, Sapeon’s market value has grown from 80 billion won to 500 billion won (US $380 billion) as of today. Sapeon has an X220 chip in the market which is built on 28 nanometer technology. The company is currently working towards launching a 7-nanometer AI chip which will be manufactured by Taiwan Semiconductor Manufacturing Company Limited, the biggest contract chipmaker in the world. 

South Korea’s Emerging AI Market

With AI chatbots gaining popularity, the demand for AI chips is on an upward trajectory. South Korea is heavily investing in capturing the AI market and Sapeon is not the first Korean company to enter the AI race. South Korean startup, Rebellions Inc., launched an ATOM AI chip last month. The ATOM chip is said to be superior to its rival NVIDIA’s A100 chip by consuming only 20% of power when compared to the latter. 

However, NVIDIA continues to be a leader in the semiconductor space with OpenAI’s ChatGPT fuelling its growth. It is estimated that over 30,000 NVIDIA GPUs will be required to power ChatGPT.