OpenAI CEO Sam Altman is leading a $150 million funding round for Rain AI, a semiconductor startup aiming to rival Nvidia’s dominance in the AI chip market. This investment, valuing Rain AI at $600 million, follows a $25 million seed round in 2022 where Altman was a major investor. Rain AI claims its chips offer 85% greater energy efficiency than Nvidia’s, a key advantage in the increasingly energy-intensive AI sector. The company recently hired former Apple executive Jean-Didier Allegrucci to head hardware engineering.
This move comes at a time when Nvidia’s relationship with Elon Musk is strengthening. Musk’s xAI is reportedly planning to purchase 100,000 Nvidia processors for its AI projects, a deal potentially worth billions. While Nvidia is expected to continue supplying chips to OpenAI, speculation suggests Altman is concerned about the growing closeness between Nvidia and Musk. This strategic investment in Rain AI is seen as a countermove, aiming to diversify OpenAI’s supply chain and potentially reduce its reliance on Nvidia. The funding round is expected to close next month.
