SambaNova raises $676M at a $5.1B valuation to double down on cloud-based AI software for enterprises
Artificial intelligence technology holds a huge amount of promise for enterprises — as a tool to process and understand their data more efficiently; as a way to leapfrog into new kinds of services and products; and as a critical stepping stone into whatever the future might hold for their businesses. But the problem for many businesses is that they are not tech businesses at their cores and so bringing on and using AI will typically involve a lot of heavy lifting. Today, one of the startups building AI services is announcing a big round of funding to help bridge that gap.
SambaNova — an AI startup building hardware and integrated systems that run on it that only officially came out of three years in stealth last December — is announcing a huge round of funding today to take its business out into the world. The company has closed in on $676 million in financing, a Series D that co-founder and CEO Rodrigo Liang has confirmed values the company at $5.1 billion.
The funding is being led by SoftBank, which is making the investment via Vision Fund 2. Temasek and the Government of Singapore Investment Corp. (GIC), both new investors, are also participating, along with previous backers BlackRock, Intel Capital, GV (formerly Google Ventures), Walden International and WRVI also participating, among other unnamed investors. (Sidenote: BlackRock and Temasek separately kicked off an investment partnership yesterday, although it’s not clear if this falls into that remit.)
Co-founded by two Stanford professors, Kunle Olukotun and Chris Ré, and Liang, who had been an engineering executive at Oracle, SambaNova has been around since 2017 and has raised more than $1 billion to date, first to build out its AI-focused hardware, which it calls DataScale, and then to build out the system that runs on it. (The “Samba” in the name is a reference to Liang’s Brazilian heritage, he said, but also the Latino music and dance speaks of constant movement and shifting, not unlike the journey AI data regularly needs to take that makes it too complicated and too intensive to run on more traditional systems.)
It typically competes against companies like Nvidia and Graphcore — another startup in the space which earlier this year also raised a significant round. However, SambaNova has also taken a slightly different approach to the AI challenge.
In December, it launched Dataflow-as-a-service as an on-demand, subscription-based way for enterprises to tap into SambaNova’s AI system without necessarily doing all the heavy lifting themselves. It’s the latter that SambaNova will be focusing on selling and delivering with this latest tranche of funding, Liang said.
SambaNova’s opportunity, Liang believes, lies in selling software-based AI systems to enterprises that are keen to adopt more AI into their business, but might lack the talent and other resources to do so if it requires running and maintaining large systems.
“The market right now has a lot of interest in AI. They are finding they have to transition to this way of competing, and it’s no longer acceptable not to be considering it,” said Liang in an interview.
The problem, he said, is that most AI companies “want to talk chips,” yet many would-be customers will lack the teams and appetite to essentially become technology companies to run those services. “Rather than you coming in and thinking about how to hire scientists and hire and then deploy an AI service, you can now subscribe, and bring in that technology overnight. We’re very proud that our technology is pushing the envelope on cases in the industry.”
The company has not disclosed many customer names so far in the work that it has done — the two reference names it provided to me are both research labs, the Argonne National Laboratory and the Lawrence Livermore National Laboratory — but Liang noted some typical use cases. One was in imaging, such as in the healthcare industry, where the company’s technology is being used to help train systems based on high-resolution imagery. Another involves building systems around custom language models, for example in specific industries like finance, to process data quicker. And a third is in recommendation algorithms, something that appears in most digital services and frankly could always do to work a little better than it does today.
Liang would not comment on whether Google and Intel were specifically tapping SambaNova as a partner in their own AI services, but he didn’t rule out the prospect of partnering to go to market. Indeed, both have strong enterprise businesses that span well beyond technology companies, and so working with a third party that is helping to make even their own AI cores more accessible could be an interesting prospect.
“We’re quite comfortable in collaborating with others in this space,” Liang said. “We think the market will be large and will start segmenting. The opportunity for us is in being able to take hold of some of the hardest problems in a much simpler way on their behalf. That is a very valuable proposition.”
The promise of creating a more accessible AI for businesses is one that has eluded quite a few companies to date, so the prospect of finally cracking that nut is one that appeals to investors.
“SambaNova has created a leading systems architecture that is flexible, efficient and scalable. This provides a holistic software and hardware solution for customers and alleviates the additional complexity driven by single technology component solutions,” said Deep Nishar, Senior Managing Partner at SoftBank Investment Advisers, in a statement. “We are excited to partner with Rodrigo and the SambaNova team to support their mission of bringing advanced AI solutions to organizations globally.”
Artificial intelligence technology holds a huge amount of promise for enterprises — as a tool to process and understand their data more efficiently; as a way to leapfrog into new kinds of services and products; and as a critical stepping stone into whatever the future might hold for their businesses.…
