Australian investors back Nvidia challenger Tenstorrent with $118m

A group of Australian investors have quietly tipped $118m into a US artificial intelligence factory chipmaker after Firmus sensationally abandoned its $44bn ASX listing hopes.

While Firmus failed to attract enough support from Australian investors – prompting a rebuke from James Packer who said the country punished risk takers – a different AI infrastructure play has commanded more attention.

US AI chip start-up Tenstorrent has more than doubled its valuation to $US6.2bn after closing a $US1.5bn Series E funding round. And a Sydney-based investment platform tipped $118m into the raise.

While equity markets have begun rejecting capital-intensive platforms banking primarily on future capacity, private funding continues to flow towards revenue-backed chip architecture and established silicon execution.

NonPublic founder and chief executive Milan Reinartz – who previously gave Australians a chance to invest in SpaceX before its blockbuster IPO – said Tenstorrent presented a vastly different opportunity to Firmus. The biggest difference: “It didn’t feel as much of a castle in the sky investment”.

Tenstorrent CEO Jim Keller. Pic as appeared in The Australian

“With Firmus there isn’t necessarily anything wrong with that business and that business model, but I think that what it showed is that the public markets, the retail markets, and institutional markets, didn’t underwrite the risk of or the build out cost essentially. There’s still a lot of execution risk that was sort of priced in,” Reinartz said.

Then there was the valuation. Reinartz said Tenstorrent’s “wasn’t as crazy”.

“And the business does have significant revenue already. That helped. It didn’t feel as much of a castle in the sky in investment, but rather it felt like there is already kind of a real business.”

But one of Firmus’s biggest backers, James Packer, has lashed out at Australia’s tendency to punish risk takers. “Australia tends to tear down aggressive entrepreneurs and America builds them up,” he said.

Reinartz said NonPublic focused generally more on large US infrastructure build out – “sort of really looking at just generally at the picks and shovels of AI”. While he acknowledged concerns about a bubble forming in the sector, he remained bullish about Tenstorrent’s prospects.

Jim Keller helms the company and is considered one of the leading authorities in microprocessor engineering, having worked on the chips from the early iPhones to Tesla’s self-driving cars.

Chip infrastructure needed

“There is quite some risk in sort of software and application layer build out, but Tenstorrent sort of fits the mould of AI infrastructure and chip infrastructure, which is required by sort of anything in AI,” Reinartz said.

“So whatever happens, we do need more chip infrastructure, and essentially, what Tenstorrent does is building a general purpose AI computer, and with an architecture that scales from a single card on a developer’s desk to full data centre clusters.”

Keller has also struck deals with key customers including Samsung, LG and Hyundai – which are also investors – with his eyes set on challenging the world’s most valuable company Nvidia.

He is betting on open architecture to disrupt the status quo.

While Nvidia relies heavily on its proprietary CUDA software stack to maintain vendor lock-in, Tenstorrent keeps its full software stack open source. This approach provides developers, cloud providers, and sovereign nations with full transparency and ownership over their computing infrastructure without being bound to a single ecosystem.

“The future of compute is open, scalable, and owned by the people building on it. Our investors believe in that model too and we appreciate their support,” Keller said.

Reinartz said Nvidia was “not going away”. “But with AI, I think you’re going to need more and more sovereign applications for especially governments, defence, corporate as well, where Tenstorrent can serve them.”

NonPublic placed Australian family offices and high-net worth investors alongside major global institutional investors participating in the Tenstorrent raise, including ARK Invest, Citadel, Fidelity Management & Research Company, Morgan Stanley, and T. Rowe Price.

Tenstorrent will use the new funding to deploy its Galaxy servers at scale, which will continue serving open-weight large language models and video generation.

This article first appeared in The Australian as Australian investors back Nvidia challenger Tenstorrent with $118m as Firmus listing collapses.

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