SambaNova's $11B valuation shows money still chasing Nvidia rivals

SambaNova hit an $11 billion valuation after closing a $1 billion funding round led by General Atlantic, with participation from Seligman Ventures, T. Rowe Price and Capital Group. The company is one of a growing number of startups betting that inference chips – semiconductors built to run AI models fast and cheap – will become a bigger part of the data center buildout than the training chips that made Nvidia the market's dominant player.

"Inference has broken everything open, and so what we're seeing now is that as a standalone company, you have the ability to really move fast and drive the business across a broad range of sectors," CEO Rodrigo Liang told CNBC at the Raise AI summit in Paris. He said the company is "strongly considering" an IPO in 2027, most likely in the U.S.

SambaNova sells its latest SN50 chip as part of a rack-scale server unit that goes into data centers. The architecture differs from Nvidia's GPU approach. Liang added the capital lets the startup "accelerate the deployments of the racks that customers really want."

JPMorgan Chase said Wednesday it would install SambaNova's systems for inference workloads inside the bank's own data centers. On-premise inference is SambaNova's pitch to companies that want faster, more secure AI – controlled by the user instead of a cloud provider.

The funding round was SambaNova's second this year. The company raised over $350 million earlier in 2024 from investors including Intel, which also struck a partnership with the startup.

A flood of private money has gone into chip startups trying to break Nvidia's grip on the inference market. South Korean startup Rebellions told CNBC on Wednesday it is targeting a Kospi IPO early next year. Last year, Nvidia itself licensed technology from inference chip maker Groq.

Public chip stocks have also rallied. The PHLX Semiconductor Index is up roughly 80% this year. SambaNova's $11 billion tag adds a private-market data point to a sector where both public and private investors keep looking for the next supplier of picks and shovels for AI infrastructure.

Nvidia, with an Alpha Score of 71, currently trades near $197, up 0.7% on the session. The SambaNova deal signals that even as Nvidia's valuation swells, institutions are still placing bets on alternative architectures for a slice of the inference spend that firms like JPMorgan see inside their own walls.