Sam Altman Sparks AI Chip Showdown: Rain AI Takes on NVIDIA's Market Reign
1min read OpenAI's CEO Sam Altman is actively seeking investment for the AI chip startup Rain AI, reportedly aiming to raise $150 million to challenge NVIDIA's dominance in the AI chip market. Rain AI claims its chips outperform NVIDIA's in both efficiency and power. Earlier this year, the company appointed former Apple chip executive Jean-Didier Allegrucci as head of hardware engineering.
According to informed sources, Altman is promoting Rain AI's second funding round, targeting a valuation of approximately $600 million. Altman was a key investor in the company's $25 million seed funding and is now encouraging all his investors to consider supporting Rain AI in the forthcoming financing round, slated to commence next month.
This fundraising effort comes as NVIDIA is strengthening ties with Tesla CEO Elon Musk, who is reportedly discussing an investment for his xAI venture. CNBC highlights Musk's plans to purchase 100,000 NVIDIA chips at a substantial cost, further intertwining the operations of NVIDIA and Musk-led ventures. Concerns have surfaced that Altman might be wary of the growing proximity between NVIDIA and Musk.
NVIDIA currently controls an impressive 85% share of the AI chip market and boasts a market capitalization of $3.5 trillion, making it the world's most valuable company. Nonetheless, industry observers suggest Altman could be anxious about the evolving partnership between NVIDIA and Musk.
Dan Ives, an analyst, notes that Rain AI is emerging as a significant contender in the AI chip industry landscape, signaling a potential shift in market dynamics as the AI revolution progresses. He remarks that Altman's backing places Rain AI under the spotlight, suggesting that any company with his endorsement is perceived as having substantial potential and room for growth in achieving its objectives.