Sapeon spun off from SK Telecom in South Korea in 2022 and is raising outside investment. The company is looking to take on Nvidia in the area of artificial intelligence chips.
Seong Joon Cho | Bloomberg | Getty Images
BARCELONA, Spain — Sapeon, a South Korean artificial intelligence chip startup headquartered in California, is raising a funding round that brings its valuation to more than $400 million, its CEO told CNBC.
The startup is backed by huge South Korean companies 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, for example those run by cloud computing companies. These AI chips are necessary for AI applications that require huge amounts of data processing.
Currently, the American company Nvidia dominate this market. But a number of established players such as AMD and startups like Sapeon, seek to challenge Nvidia.
“AI solutions are going to grow a lot with the evolution of AI services like ChatGPT,” Soojung Ryu, CEO of Sapeon, told CNBC in a Mobile World Congress interview that aired Wednesday.
ChatGPT is the viral chatbot developed by OpenAI. It caused a stir in the tech world, with giants from Google to Chinese firm Baidu scrambling to unleash their own rivals. Tech executives say ChatGPT has put AI apps on the map.
Analysts at Bernstein expect ChatGPT to be a multi-billion dollar boon for chipmakers looking to power these AI models.
“We would like to build this type of system (AI chips) to have an opportunity for the business,” Ryu said.
Sapeon was established in 2016 within SK Telecom, one of South Korea’s largest telecommunications companies. SK Telecom then spun off the business last year and raised outside investment.
Ryu said the company is currently fundraising for a $400 million valuation.
South Korean semiconductor companies, including Samsung and SK Hynix, have generally been strong in memory chips that go into devices like PCs. Sapeon is one of the first South Korean companies to try to break into the AI chip market.
Ryu said Sapeon was targeting the US market, which would pit it against Nvidia. When asked if Sapeon could challenge Nvidia, Ryu replied “yes”.
Currently, Sapeon has a chip on the market called X220. It is built 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 it can fit on a single semiconductor. Generally, downsizing to nanometer size can produce more powerful and efficient chips.
Ryu said the company will launch a 7-nanometer AI chip this year and it will be manufactured by TSMC, the world’s largest contract chipmaker. This would bring it closer to the current technology in the market.