Sapeon was spun off from South Korea’s SK Telecom in 2022 and is attracting outside investment. The company is looking to take on Nvidia in the field of artificial intelligence chips.

Songjun Cho | Bloomberg | Getty Images

BARCELONA, Spain — Sapeon, the California-headquartered South Korean artificial intelligence chip startup, is raising a funding round that values ​​it at more than $400 million, its CEO told CNBC.

The startup is backed by giant South Korean firms SK Telecom, memory chip maker SK Hynix and SK Square, an investment company spun off from SK Telecom.

Sapeon develops artificial intelligence semiconductors for data centers, such as those run by cloud computing firms. These AI chips are essential for AI applications that require processing huge amounts of data.

Currently an American firm Nvidia dominates this market. But a number of famous players such as AMD and startups like Sapeon are looking to challenge Nvidia.

“Artificial intelligence solutions will be greatly advanced by the development of artificial intelligence services such as ChatGPT,” Sojung Ryu, CEO of Sapeon, told CNBC in an interview at Mobile World Congress that aired Wednesday.

ChatGPT is a viral chatbot developed by OpenAI. It’s caused a stir in the tech world, with giants from Google to Chinese firm Baidu scrambling to unseat their rivals. Tech executives say ChatGPT has put AI applications on the map.

Bernstein analysts expect ChatGPT to be a multibillion-dollar boon for chipmakers looking to power these AI models.

“We would like to create such a system (artificial intelligence chips) to have a business opportunity,” Ryu said.

Sapeon was established in 2016 by SK Telecom, one of South Korea’s largest telecommunications companies. Then, last year, SK Telecom spun off the firm and attracted outside investment.

Ryu said the company is currently raising $400 million in funding.

South Korean semiconductor firms, including Samsung and SK Hynix, tend to be strong in memory chips that go into devices like PCs. Sapeon is one of the first companies from South Korea to try to crack the AI ​​chip market.

Ryu said Sapeon is targeting the US market, which will pit it against Nvidia. When asked if Sapeon could challenge Nvidia, Ryu said yes.

Sapeon currently has one chip on the market called the X220. It is built on the so-called 28-nanometer technology. The number in nanometers refers to the size of each individual transistor on the chip. The smaller the transistor, the more they can fit into one semiconductor. Generally, reducing the nanometer size can yield more powerful and efficient chips.

Ryu said the company will release a 7-nanometer AI chip this year, which will be manufactured by TSMC, the world’s largest contract chip maker. This would bring it closer to the current technology on the market.

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