Nvidia to invest in rival chip startup d-Matrix at $5B valuation
What's the deal? Nvidia plans to invest in d-Matrix, a seven-year-old developer of AI server chips that competes with Nvidia itself, according to three people with knowledge of the deal. The Information previously reported that d-Matrix was targeting new funding at a $5 billion valuation.
Why now? The move follows an announcement three months ago that the two companies would make their chips work in tandem on AI inference workloads, aiming to boost computing efficiency. It is Nvidia's first deal with an AI inference chip startup since its $20 billion licensing agreement with Groq in December.
What does d-Matrix do? The startup focuses on speculative decoding, a technique that speeds up AI models. In the forthcoming joint system, d-Matrix chips will run a small model that guesses a larger model's answer, while an Nvidia GPU runs the bigger model to verify those guesses.
What's the endgame? The investment is part of Nvidia's effort to make its technology compatible with rival chip designers and pull them into its hardware ecosystem — even as it gains market share against nearly all of them. The approach could benefit Nvidia's networking products, which link server racks to run heavy AI tasks as one system.
Over the past 12 months, Nvidia has taken multibillion-dollar stakes in more-established rivals IntelDealroom has a profile for this one. Try Dealroom → and Marvell to support integrations with its GPUs. Amazon raised a similar prospect in August for its Trainium chips, and SambaNova Systems demonstrated a way to connect its chips with Nvidia GPUs in June.
What could go wrong? The Department of Justice is investigating whether Nvidia structured the Groq deal to avoid a formal review of its impact on the chip market, according to people familiar with the probe. It is also unclear when the broader rival integrations will happen at scale.
The signal: Using chips from different designers on the same workload — known as disaggregated inference — is a new concept, and Nvidia's spree of deals shows it won't bet on a single partner. Rivals have struggled to eat into Nvidia's lead, so they increasingly choose to work alongside its GPUs rather than replace them.
Read more: The Information
Image credit: NeoSpire
