Intel, CPPIB Back Canadian Chip Startup in $125 Million Round

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Intel Capital co-led a $125 million investment in Untether AI Corp., a Toronto-based startup that develops high-performance chips for artificial intelligence programs.

Canada Pension Plan Investment Board, Canada’s largest pension fund, also participated in the funding round, Untether said in a statement. Intel Capital, the venture arm of chip-making behemoth Intel Corp., is a long-time investor in the startup.

A spokesperson for Untether declined to comment on the company’s current market value but Chief Executive Officer Arun Iyengar said it’s well positioned to capture market share and eventually “become a multibillion-dollar company.”

“Today the AI portion of the chip industry is about 3% of the entirety of the market,” Iyengar said in an interview. “By the end of the decade, it is going to be more like 50%.”

A pandemic-induced global chip shortage is likely to improve in 2022, according to Intel CEO Pat Gelsinger, but the market won’t be back in balance until 2023. Longer term, Gelsinger predicts strong growth for the industry, fed by increasing use of chips, including for artificial intelligence.

Traditional artificial intelligence chips use just a small fraction of their power for AI processing; most goes to data transfer processes, Iyengar said. Untether’s chips are more efficient, freeing up power that can be used directly for AI processing, he said.

Untether plans to use the funding for product development and market expansion. The company expects to double its headcount in the next nine months, to about 150 people, Iyengar said.

The round was co-led by an affiliate of Tracker Capital Management LLC, a venture capital firm, with additional participation from Radical Ventures. Tracker was founded by Stephen A. Feinberg, co-founder of Cerberus Capital Management.

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