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Canada’s resurgent semiconductor industry has produced its second “unicorn” this spring, after Toronto’s Tenstorrent Inc. raised US$200-million led by U.S. fund giant Fidelity Management and Research Co., giving the chip startup a valuation of US$1-billion.

The funding, announced Thursday, comes as Tenstorrent prepares to ship its inaugural Grayskull processor to market in the second half of the year to power artificial intelligence-focused computers. It also follows the company’s recruitment early this year of chief technology officer Jim Keller, a former senior executive with chip giants Intel and AMD who has been called “one of the top chip architects of our time.

Startups that achieve US$1-billion valuations are referred to as unicorns. Semiconductor startup Alphawave IP Group PLC, which is managed out of Toronto but recently redomiciled to Britain, achieved that milestone and went public this month on the London Stock Exchange.

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Other Canadian startups to reach unicorn-level valuations in recent months either through financings or takeovers include Ada Support Inc., Hopper Inc., Wealthsimple Technologies Inc., Galvanize Inc., Verafin Inc., AbCellera Biologics Inc., Benevity Inc., Dapper Labs, Clear Finance Technology Corp. and Themis Solutions Inc. (known as Clio).

In addition to Alphawave and Tenstorrent, Toronto-based Xanadu, a maker of quantum processors based on its “light-squeezing” technology, is expected to announce in the coming weeks a US$100-million venture financing, led by Bessemer Venture Partners.

Mr. Keller was the first investor in five-year-old Tenstorrent, backing founder and chief executive officer Ljubisa Bajic, a former colleague at AMD. Mr. Keller told HPCWire this year, “I was always impressed by [Mr. Baljic’]s approach to building AI silicon. He knows how [graphics processing units] work, how the software works, and he also knows the math behind AI, which is a rare combination.”

Mr. Keller said he joined the company because, “I think the AI revolution is bigger than the internet.”

Janet Bannister, managing partner of Montreal-based Real Ventures, an early backer of both Tenstorrent and Xanadu, said when her firm first met Mr. Baljic in 2016, “We were very impressed with his engineering capabilities. His vision to create the next generation of computing infrastructure to support the shift to an AI-first world was extremely exciting to us.”

She said the latest financing “is a testament to the strength of Canada’s deep tech sector.”

Other backers of Tenstorrent include Eclipse Ventures, Epic CG and Moore Capital.

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In addition to Grayskull, Tenstorrent is planning to launch a cloud-based service to allow developers to run their models on its system without having to first buy the hardware. “We are bringing to market a high programmable chip at an accessible price point as a means of driving innovation,” Mr. Keller said in a release.

“AI is going to transform the data centre and Tenstorrent’s architecture is best positioned to address this data-written future by being a developer-focused solution.”

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