Why the first GPU financiers are turning to inference chips in a $400 million deal
A $400 million chip-backed loan points to the next wave of AI infrastructure deals. General Compute, an AI inference cloud startup, has landed a $400 million loan from Upper90, a tech investment firm. It might be the first deal to put up inference-specific chips as collateral - chips built to run already trained AI models quickly and efficiently, rather than the more expensive chips used to build the models in the first place.
Key Takeaways
- The financing is the latest signal that markets are responding to concerns over the price of AI tools and tokens by turning to infrastructure that runs open source models more cheaply than the newest LLMs from frontier labs.
Founded by CEO Finn Puklowski, General Compute raised a $15 million seed round in May to build an inference neocloud around silicon from SambaNova, an Intel-backed chipmaker.
- The challenge is getting a lot of these chips, especially when you're a brand-new company.
Upper90 co-founder and CEO Billy Libby, a former Goldman Sachs quantitative trader, had a playbook for this: In 2021, his firm financed GPU purchases by Crusoe, the energy-focused data center startup, which he believes was the first loan against the value of advanced chips.
- " Now that GPUs are comparatively well understood and perhaps over-bought , Upper90 is turning to companies like General Compute to ride the next wave of the AI boom.
"We think open source models are going to be important, and we went and looked for a player last year that was in inference," Libby said.
- General Compute's ability to access chips outside of Nvidia's ecosystem matters for the same reason.
TensorWave, another AI infrastructure company, is making a similar bet on a partnership with AMD.
- Tim Fernholz Senior Reporter Tim Fernholz is a journalist who writes about technology, finance and public policy.
Stats & Key Facts
- #A $400 million chip-backed loan points to the next wave of AI infrastructure deals.
- #A $400 million chip-backed loan points to the next wave of AI infrastructure deals.
- #General Compute, an AI inference cloud startup, has landed a $400 million loan from Upper90, a tech investment firm.
- #Founded by CEO Finn Puklowski, General Compute raised a $15 million seed round in May to build an inference neocloud around silicon from SambaNova, an Intel-backed chipmaker.
The financing is the latest signal that markets are responding to concerns over the price of AI tools and tokens by turning to infrastructure that runs open source models more cheaply than the newest LLMs from frontier labs. Founded by CEO Finn Puklowski, General Compute raised a $15 million seed round in May to build an inference neocloud around silicon from SambaNova, an Intel-backed chipmaker. (Neoclouds are purpose-built for AI workloads, unlike the general-purpose infrastructure offered by traditional hyperscalers like AWS or Azure.
) The company's SN50 chips are designed for inference. They're power-efficient and don't require expensive water-cooling systems, which means they can be deployed more quickly than GPUs across a larger variety of data centers. General Compute says the new chips will provide 16 times faster inference than GPU-based clouds.
The challenge is getting a lot of these chips, especially when you're a brand-new company. Upper90 co-founder and CEO Billy Libby, a former Goldman Sachs quantitative trader, had a playbook for this: In 2021, his firm financed GPU purchases by Crusoe, the energy-focused data center startup, which he believes was the first loan against the value of advanced chips. Traditional lenders eschewed such deals at the time because of the risks and uncertainties around GPU depreciation.
For more details please read the original article at TechCrunch AI.
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