SAN FRANCISCO, April 1 (Reuters) - Cerebras Systems, a

Silicon Valley-based AI chip company, and Canadian chip startup

Ranovus said on Tuesday that they had been awarded a $45 million

contract from the U.S. military to speed up connections between

computing chips.

Cerebras, which aims to challenge Nvidia ( NVDA ) in the AI chip

race, has already filed for an initial public offering. Unlike

most competitors whose chips are a bit larger than a U.S.

postage stamp, Cerebras makes chips the size of a dinner plate.

It is betting its roughly foot-wide chip can outperform Nvidia's ( NVDA )

cluster of smaller chips.

The contract with the Defense Advanced Research Projects

Agency (DARPA) will focus on connecting Cerebras chips together

with networking technology from Ranovus, an Ottawa,

Ontario-based firm with backing from the Canadian government.

Ranovus uses light, rather than electrical signals, to

transfer information between chips more quickly and using less

power.

The challenge of integrating these optical connections

directly with computing chips has kicked of a funding frenzy as

startups seek different ways to solve the problem.

Cerebras and Ranovus would not provide details on how they

plan to tackle this, but said DARPA was looking for computing

systems capable of simulating complex battlefields in real time.

"We want to do something that's 150 times faster and uses

three watts instead of 30," Cerebras CEO Andrew Feldman told

Reuters on Monday. "That's why we brought the idea to DARPA.

They have a reputation for providing funding for extremely

difficult, extremely transformative projects."

Ranovus has produced demonstration chips with Advanced Micro

Devices ( AMD ) and Taiwan's MediaTek ( MDTTF ), but said the

collaboration with Cerebras will involve new technology that it

has not yet shown.

"What we plan to do together is something very different,"

Ranovus CEO Hamid Arabzadeh told Reuters.

"There are new things that we have developed in the past

year that we're going to bring into this project, which we

haven't publicly announced."