Rebellion secures $124M funding from Samsung to develop AI Rebel chip

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Rebellions, a South Korean fabless AI chip startup, said today it has closed $124 million (165 billion KRW) in a Series B round of funding to develop its third AI chip, called Rebel. The startup will also utilize the new capital, overfunded with an initial target of $90 million, for increasing production of its data center-focused chip, Atom, and for recruitment.

This Series B places the three-year-old startup at roughly $658 million (880 billion KRW) post-money, CFO of Rebellions Sungkyue Shin said in an exclusive interview with TechCrunch. This latest investment raises the total raised to around $210 million since Rebellions’ beginning in 2020.

KT, the South Korean telecom giant, led this recent round as a strategic investor. Previous supporters Temasek’s Pavilion Capital and Korea Development Bank, and new investors including Korelya Capital and DG Daiwa Ventures, also joined in.

Rebellions’ fundraising arrives at a pivotal moment in the chip industry, especially concerning the development and use of AI chips.

Nvidia is the AI chip market leader, its branding synonymous with the AI boom that is at present overwhelming the technology world. Many have noticed how Nvidia has thrived in part because of the moat created around an ecosystem of hardware and software. However, it’s far from game-over for the rest of the field. Data processing and related high costs remain substantial issues when it comes to AI applications, so the race continues in the quest for innovative breakthroughs to enhance these.

Developments are arising from various directions. Big Tech titans such as Google, Amazon, Apple, and Microsoft develop or possess their own chips to integrate AI into their products and services. Open AI chief executive officer Sam Altman reportedly visited South Korea last week to meet the country’s chip industry leaders, Samsung and SK Hynix. Moreover, Open AI is said to be raising billions of dollars to establish chip fabrication factories, to develop its own AI chips. And there are a number of startups beyond Rebellions presenting new concepts to expedite processing while enhancing efficiency.

Collaborate with Samsung

This fundraising event — which has been rumored for months — comes after other moves at the startup. Last October, Rebellions announced that it would co-create its newest Rebel chip in partnership with Samsung Electronics, building on a relationship it initially forged around its Atoms chips. The two companies aim to finalize the development of Rebel by the end of this year and commence mass production in 2025, Shin said, adding that the next-generation AI chip will target the generative AI market operating large language models (LLMs) and hyperscalers.

Shin specified to TechCrunch that Rebel will utilize Samsung Electronics’ 4-nanometer fabrication process, and its AI chip will be deployed in Samsung’s advanced memory chip technology HBM3E, tailored to manage high bandwidth memory, utilized for constructing and operating large language models. Rebellions’ unique selling proposition is a claim that its technology and products have more versatility than tailored AI chips, meaning they are able to support various generative AI models that are in need of AI accelerators.

The company CFO emphasized that Rebellions will collaborate with Samsung from co-development and chip design to mass production of Rebel. There is a second incentive for Samsung’s work here: In addition to its efforts in chips, South Korea’s largest memory chip maker has been working on its own generative AI model, Samsung Gauss.

Atom and Ion

It’s also been working with customers using its previous generations of chips. In May 2023, Rebellions’ strategic investor, KT, integrated Atom, Rebellions’ data-center targeted AI chip, in its cloud-based neural processing units (NPU) infrastructure. Rebellions says it expects to generate revenues from Atom in the second half of this year and will continue to produce that chip model via Samsung’s 5-nanometer fabrication process. Atom is designed for data centers and language models of up to 7 billion parameters, while Rebel targets larger large language models, Shin noted.

Meanwhile, the startup’s first AI chip, Ion, which was launched in November 2021, is in the process of qualification testing in the U.S. and has yet to sign on any commercial customers. Ion is designed for edge computing and one key use case, the company believes, will be in financial services applications, where larger institutions building their own hardware could use the chips to power stock prediction and trading applications.

Rebellions CEO Sunghyun Park, a former quant developer at Morgan Stanley in New York, and four co-founders set up the AI chip startup in 2020.

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