Feb 11 - Positron, a startup chip maker that aims to

compete with Nvidia ( NVDA ), said Tuesday it raised $23.5

million to scale production of its U.S.-made artificial

intelligence chips.

Valor Equity Partners, known for backing Elon Musk's

companies, Atreides Management, Flume Ventures and Resilience

Reserve were among the investors who participated in the round.

Reno-based Positron says its chips, which are manufactured

in Arizona, use less than a third of the power of Nvidia's ( NVDA )

top-of-the-line H100 graphical processing units, while

maintaining the same performance.

Positron's chips are intended for inference, the period when

an AI model is being used, rather than for training AI models.

At the moment, demand is higher for training chips, but analysts

have predicted the need for inference chips could surpass them

as more AI applications are deployed.

Generative AI model makers such as OpenAI, Google

and Meta have said they will invest heavily in AI

infrastructure.

Meta has said it will spend up to $65 billion this year,

while Microsoft has said it will spend $80 billion. OpenAI

announced a $500 billion Stargate infrastructure program last

month.

Currently, Nvidia's ( NVDA ) chips have a market share of roughly

80%, but rising costs and concern about depending on a single

supplier have led customers such as Microsoft, Meta and OpenAI

to explore in-house or external alternatives.