Chip-makers including SambaNova Systems, Groq, and Cerebras Systems all say they are making chips that can perform AI tasks better than processors from Nvidia, whose multipurpose graphics chip sets now dominate the AI market.

Cerebras Systems CEO Andrew Feldman said that AI algorithms need specific chips rather than chips that can serve multiple purposes.

Cerebras' innovation is a large chip, 56 times the size of a postage stamp and has 2.6 trillion transistors.

Gartner analyst Alan Priestley has counted over 50 firms now developing chips specifically for AI applications and said there may be more. He expects the market to be worth over $70 billion by 2025, up from $23 billion in 2020.

Venture funding for US chip startups reached $1.8 billion last year, the highest level in at least two decades, according to data firm PitchBook. Another $1.4 billion has already been invested this year.

In April alone, SambaNova said it raised $676 million for its reconfigurable AI chips. Groq, which boasts of a super-powerful single-core design that is fast and easy to program, announced it had raised $300 million.

Battery Ventures' general partner, Dharmesh Thakker, said he started considering chip investments a few years ago after he noticed his AI software companies were all working with Nvidia.

"We said, 'Hey, there might be an opportunity to build another Nvidia in that whole space around AI.'"