AI Chip startup Rebellions snags funding to challenge Nvidia

Rebellions Inc. secured $124 million from investors including KT Corp. to accelerate the development of a next-generation AI chip, underscoring growing interest in the hardware that drives artificial intelligence.

The South Korean startup closed a Series B financing led by the wireless carrier at a valuation of more than $650 million. Singapore's Pavilion Capital, KT's datacenter subsidiary KT Cloud Co. and Shinhan Venture Investment Co. took part in the financing, the company said in a statement. New backers that joined the deal included Koreyla Capital from France and Japan's DGDV.

Rebellions is one of several emergent players trying to break into the market for semiconductors that train and run AI, competing against fellow startups from California-based Groq Inc. to Toronto's Tenstorrent Inc. as well as established leader Nvidia Corp. Global capital is flowing toward firms from the US to China that are building advanced AI, a wave of activity galvanized by the advent of OpenAI's ChatGPT.

The Korean startup plans to use the new capital to ramp up hiring and accelerate the development of "Rebel," its next-generation AI chip designed for running large language models, with Samsung Electronics Co. South Korea has earmarked about 826 billion won ($618 million) to back homegrown AI chip designers through 2030, seeking to build a foundation beyond the memory semiconductors that Samsung and SK Hynix Inc. now dominate.

Rebellions and its peers design silicon that focuses on specialized tasks such as computer vision and chatbots, while Nvidia workhorses still do the heavy lifting in terms of training large language models. At home, it competes with FuriosaAI, backed by search leader Naver Corp. and the state-run Korea Development Bank. Sapeon Inc., backed by SK Telecom Co. and SK Hynix, is another Korean challenger.

Rebellions's existing backers include Korea Development Bank and internet conglomerate Kakao. Founded in 2020, it's turning to Samsung to fabricate its chips, taking advantage of its 4-nanometer technology.