Omdia: AI chip startups face 2023 stress tests

LONDON – Over 100 distinct venture capitalists (VCs) have invested over $6bn since 2018 into the top 25 artificial intelligence chip startups, according to Omdia's new Top AI Hardware Startups Market Radar.

However, while 2021 will be remembered as an exceptional year, it is clear the funding environment has changed. The transition from a global chip shortage to an inventory crisis, the turning point in monetary policy, and the economic downturn in 2022 mean it is now more challenging to raise funding.

Omdia expects that more than one major startup is likely to exit this year, possibly through a trade sale to either a hyperscale cloud provider or a major chipmaker. "The most likely exit route is probably via trade sales to major vendors," says Harrowell. "Apple has $23bn in cash on its balance sheet and Amazon $35bn, while Intel, NVIDIA, and AMD have some $10bn between them. The hyperscalers have been very keen to adopt custom AI silicon, and they can afford to maintain the skills involved."

Omdia also found that half of the $6bn in VC funding over this time period has been directed into only one technology – large-die, CGRA accelerators, which is often designed with the aim of loading entire AI models on-chip. However, there are questions about this approach given the continuing growth of AI models.

Read the full press release here.

Omdia