Tenstorrent Investment Thesis

By Frank Downing

Director of Research, Next Generation Internet

As Director of Research, Frank guides the research of the Next Generation Internet team. Frank's research focuses on cloud computing and cryptoassets.

We offer our view of Tenstorrent because it is part of the total ARK Venture Fund portfolio. To see the most updated portfolio, please click here.

Tenstorrent, a semiconductor startup, is pioneering the development of high-performance CPU and AI chips. Distinctively, their technology is grounded in the open-source RISC-V[1] instruction set, a welcome alternative to the closed-source ecosystems and subsequent vendor lock-in found within the traditional semiconductor industry. Tenstorrent’s business model focuses on monetizing through intellectual property (IP) licensing and the sale of AI accelerators. Future plans include expanding into the chiplet market, a strategy geared for modular and versatile chip designs.

Semiconductor industry legend Jim Keller leads Tenstorrent, bringing significant credibility and expertise to the company. Keller’s influence is evident in Tenstorrent’s ambitious vision and emphasis on challenging traditional chip architecture. The broader team includes experts from companies like Tesla, Apple, AMD, and ARM.

Tenstorrent already has emerged as a leader in RISC-V architecture-based design, a fact underscored by Google’s consideration of the company as a partner for Android’s reference design for RISC-V. In the data center arena, Tenstorrent’s Galaxy server, powered by Wormhole chips, showcases cost-effectiveness and performance per watt superior to Nvidia’s DGX A100 servers. The efficiency of Tenstorrent’s Tensix cores allows Tenstorrent to achieve higher performance, particularly in memory usage, at lower power and cost without relying on high-bandwidth memory (HBM). That said, the company’s operational scale currently constrains it to develop one node behind the cutting edge, landing Tenstorrent behind Nvidia in terms of top-tier performance capabilities.

In our view, artificial intelligence will drive tremendous productivity gains across knowledge work and autonomous robotics. While Nvidia and ARM dominate the market in data centers and the edge, respectively, industry actors, increasingly wary of vendor lock-in, appear excited to diversify suppliers and, in some cases, build their own chips.

Tenstorrent’s use of open-source RISC-V architecture, as well as its leadership team with a proven track record of pioneering chip design, presents a compelling investment opportunity in the semiconductor industry. Thanks to its flexible business model geared toward both IP licensing and hardware sales, we believe the company is well-positioned within a competitive landscape.

Disclosures

Holdings subject to change. Not a recommendation to buy, sell, or hold any specific security.

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