Microsoft-backed (NASDAQ:MSFT) semiconductor company d-Matrix on Nov. 12 announced it raised $275 million while claiming its artificial intelligence chips outperform graphics processing units-based systems, which are often built around Nvidia (NASDAQ:NVDA) hardware.
d-Matrix secured Series C funding at a $2 billion valuation, with the round co-led by BullhoundCapital, Triatomic Capital, and Singapore’s Temasek sovereign wealth fund. Microsoft participates in the company's investor base through its M12 venture arm. The funding brings d-Matrix’s total capital raised to $450 million since its 2019 founding, according to the company.
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The Santa Clara, California-based startup said its inference platform delivers tenfold better performance, triple the cost efficiency, and up to five times superior energy efficiency compared to GPU-based systems.
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d-Matrix founder and CEO Sid Sheth and Chief Technology Officer Sudeep Bhoja started the company six years ago with a contrarian thesis. While the industry focused on training AI models, they built technology specifically for inference, running those models at scale.
“When we started d-Matrix six years ago, training was seen as AI’s biggest challenge, but we knew that a new set of challenges would be coming soon,” Sheth said in the company's statement. “We predicted that when trained models needed to run continuously at scale, the infrastructure wouldn’t be ready.”
The founders, who previously shipped over 100 million chips, assembled a team of 250 employees across offices in Santa Clara, Canada, Australia, India and Serbia.
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The funding attracted investors from four continents, with new participants including Qatar Investment Authority and Singapore's Economic Development Board Investments joining existing backers M12, Nautilus Venture Partners, Industry Ventures, and Mirae Asset, according to d-Matrix.
"The explosion in AI inference demand shows us that efficiency and scalability can be key contributors to revenue capture and profitability for hyperscalers and AI factories," M12 Managing Partner Michael Stewart said in d-Martix's statement. "d-Matrix is the first AI chip startup to address contemporary unit economics in LLM inference for models of a range of sizes that are growing the fastest."
The company’s Corsair accelerators can generate 30,000 tokens per second with 2-millisecond latency on Llama 70B models, d-Matrix said. This speed enables running 100-billion-parameter models within a single server rack.
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d-Matrix frames its technology as addressing AI’s sustainability challenges, saying that its platform allows one data center to accomplish what traditionally requires 10 facilities.
"AI inference is becoming the dominant cost in production AI systems, and d-Matrix has cracked the code on delivering both performance and sustainable economics at scale," Triatomic Capital General Partner Jeff Huber said in d-Matrix's statement. "Their digital in-memory compute architecture is purpose-built for low-latency, high-throughput inference workloads that matter most."
The company recently unveiled its SquadRack reference architecture through partnerships with Arista (NYSE:ANET), Broadcom (NASDAQ:AVGO), and Super Micro Computer (NASDAQ:SMCI). This ecosystem approach aims to accelerate adoption among hyperscale, enterprise, and sovereign customers, d-Matrix said.
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