AI Startup Roundup: OpenAI Buying Chips from Sam Altman-backed Startup

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Conflict of interest? OpenAI to buy chips from Rain AI

OpenAI has a $51 million deal in place to purchase AI chips from a startup that CEO Sam Altman has personally invested in, according to Wired.

In 2019, OpenAI penned a deal with Rain AI, a San Francisco startup building chips designed to replicate the way the human brain processes information. Altman led a Rain seed round a year earlier.

Last month, Altman was fired and re-hired within five days for not being “consistently candid” with OpenAI’s nonprofit board. No other details were released and the issue under internal investigation.

Under the deal, Rain would provide OpenAI with its neuromorphic processing units, or NPUs. Wired saw investor documents from Rain that said the startup is hoping to ship its first batch of hardware in October 2024.

Rain contends its NPUs could yield 100 times more computing power for AI training with greater energy efficiency than GPUs.

The news of OpenAI’s deal emerged as the Biden Administration forced a Saudi Aramco-backed venture capital firm to sell its shares in Rain. Aramco's Prosperity7 was told to unwind the deal on the grounds of national security concerns, Bloomberg reported.

Hardware has become a major concern for OpenAI and others in building next-gen AI systems. As compute demand increases, reports emerged in October that the maker of ChatGPT is considering designing its own hardware. OpenAI currently relies on chips from Nvidia, using Microsoft supercomputers to train its models. But Altman has bemoaned the scarcity of GPUs, wanting to find alternative ways to bring down running costs.

Shanghai Biren Intelligent Technology Co.

The Chinese AI chipmaker attracted funds from government-backed investors after being blacklisted by the U.S. in October, according to Bloomberg. It is in talks with Hong Kong officials to set up shop in this Chinese territory. Hong Kong has ambitions to develop a local chip industry on its islands.

AI chips are being sought after by Chinese tech firms after the U.S. restricted exports of AI chips to China. Chinese tech giant Baidu and others are seeking domestic alternatives.

Latest funding: 2 billion yuan ($280 million)

Lead investors: Investors backed by the government of Guangzhou, a southern city in China

PhysicsX

London-based PhysicsX is attempting to bring generative AI to the engineering world. Its tech is designed to accelerate physics simulations and engineering optimizations to create improved new products and materials. The startup is made up of over 50 simulation engineers, machine learning and software engineers and data scientists.

Latest funding:  $32 million, series A

Lead investor: General Catalyst

Other investors: Standard Investments, NGP, Radius Capital

Angel investors: KKR co-founder and co-executive chair, Henry Kravis

Funding plans: Having emerged from stealth, PhysicsX plans to use the funds to accelerate its growth across customer delivery, platform engineering, and fundamental research.

Kognitos

Kognitos is a generative AI startup that developed a SaaS platform which uses natural language processing automation (NLPA) to let business users automate processes in plain language. The startup said its approach to automation is to use a deterministic English interpreter to remove hallucinations and biases in generative AI. It is based in the Silicon Valley-area of San Jose, California.

“The time has come for the machine to natively understand plain English,” said Binny Gill, founder and CEO of Kognitos, in a statement. “No developer should be needed to translate business requirements into automation because now the business requirements become the automation.”

Latest funding: $20 million, series A

Lead investor: Khosla Ventures

Other investors: Clear Ventures, Engineering Capital and Wipro Ventures

Funding plans: Enhance the platform’s ability to understand and execute complex business processes and expand partnerships and integrations with other business applications to improve interoperability.

Syrup Tech

Based in New York, Syrup offers AI-powered planning, buying and inventory optimization tools for retailers.

Its platform connects inventory data with historical information and real-time data to help retailers reduce over-production and make optimal decisions regarding stock.

Latest funding: $17.5 million, series A

Lead investor: Accel Partners

Other investors: Gradient Ventures, 1984 Ventures

Funding plans: Syrup plans to grow its team across engineering, product and sales.

Secondmind

Secondmind develops cloud-native AI solutions for the software in vehicles that will reduce design simulation time and calibration overhead as well as improve energy efficiency and performance. It has dual headquarters in Cambridge, U.K., and Yokohama, Japan.

The AI startup is expanding its partnership with new investor Mazda to focus on simplifying the design and development of automotive technology.

Latest funding: $16 million, series B2 (includes conversion of a Future Fund note)

New investor: Mazda

Other investors: Amadeus Capital Partners, Atlantic Bridge Ventures, Cambridge Innovation Capital

Funding plans: Scale key aspects of its business, including ramping up sales and marketing and accelerating the development of its cloud-native optimization engine

Layla

Social media is now the inspiration for many travelers as they look for their next adventure. German AI startup Layla takes it a step further by offering booking services alongside short travel videos. It also uses large language models to describe what travelers can expect at this destination. The app includes an Instagram Travel Planner.

Latest funding: €3 million ($3.3 million)

Lead investors: Firstminute Capital (set up by the co-founder of lastminute.com, Brent Hoberman) and M13

Other investors: Celebrity Paris Hilton, Booking.com co-founder Andy Phillips, co-founder of Skyscanner Barry Smith