A former AI hardware rising star now hunts a buyer, as SambaNova struggles for funding while NVIDIA tightens its grip on the chip market.
A US semiconductor startup, SambaNova Systems, is exploring a sale after struggling to secure new investment, signalling growing tensions in the competitive market for artificial intelligence (AI) chips. The Palo Alto, California-based company, once viewed as a serious challenger to NVIDIA, is facing a cash crunch and waning investor confidence.
The startup last achieved a valuation of $5 billion in 2021. It has focused on developing custom processors designed to handle AI training and inference more efficiently than traditional graphics chips. However, demand for specialist hardware has shifted heavily towards Nvidia, making life difficult for smaller rivals.
Reports suggest SambaNova attempted to raise further capital but met scepticism from backers seeking clearer financial returns. Many investors have become more cautious about AI infrastructure firms because of high operating costs and long product development cycles.
SambaNova was founded in 2017 by a team with links to Stanford University and Oracle. It built early momentum with strong financial backing, including a significant funding round led by SoftBank’s Vision Fund. Those resources helped advance its chip technology and enterprise-focused hardware-software offerings.
The company has recently tried to pivot its strategy. It now targets customers looking for complete generative AI solutions, including subscription-based services. Despite technical achievements, adoption has been slower than hoped, and revenue growth has not kept pace with spending.
Industry analysts believe a sale could attract large cloud providers or technology firms that want to expand their AI capabilities quickly. Any deal would safeguard SambaNova’s technical assets and could support rollout in new markets.
The situation reflects wider consolidation across the global AI chip sector. Only a few companies with strong commercial traction are thriving. Others face mounting risk as competition rises and investor priorities shift.
