BARCELONA, Spain — Sapeon, a South Korean artificial intelligence chip startup headquartered in California, is raising a funding round that will take its valuation to over $400 million, its CEO told CNBC.
The startup is backed by major South Korean firms SK Telecom, memory chip maker SK Hynix and SK Square, an investment company spun off from SK Telecom.
Sapeon designs artificial intelligence semiconductors for data centers, such as those operated by cloud computing companies. These AI chips are required for AI applications that require enormous amounts of data processing.
Currently US company NVIDIA dominates this market. But also a number of established players such as AMD and startups like Sapeon want to challenge Nvidia.
“AI solutions will grow a lot thanks to the advancement of AI services like ChatGPT,” Sapeon CEO Soojung Ryu told CNBC in an interview at Mobile World Congress that aired on Wednesday.
ChatGPT is the viral chatbot developed by OpenAI. It has caused a stir in the tech world as giants from Google to Chinese company Baidu scramble to unleash their own rivals. Tech leaders say ChatGPT has put AI applications on the map.
Bernstein analysts expect ChatGPT to be a multi-billion dollar boon for chipmakers looking to power these AI models.
“We would like to build this kind of system (AI chips) to have a chance for business,” Ryu said.
Sapeon was founded in 2016 within SK Telecom, one of South Korea’s largest telecom companies. SK Telecom then spun off the company last year and garnered outside investment.
Ryu said the company is currently raising $400 million worth of money.
South Korean semiconductor companies like Samsung and SK Hynix have typically been strong in memory chips that go into devices like personal computers. Sapeon is among the first South Korean companies trying to break into the AI chip market.
Ryu said that Sapeon is targeting the US market, which would pit it against Nvidia. When asked if Sapeon can challenge Nvidia, Ryu replied “yes”.
Sapeon currently has a chip called the X220 on the market. It is based on the so-called 28-nanometer technology. The nanometer number refers to the size of each individual transistor on a chip. The smaller the transistor, the more of it can be packed on a single semiconductor. Typically, a reduction in nanometer size can lead to more powerful and efficient chips.
Ryu said the company will release a 7-nanometer AI chip this year, made by TSMC, the world’s largest contract chipmaker. That would bring it closer to the current technology on the market.