March 2, 2023: Sapeon, a South Korean A.I. chip startup headquartered in California, is increasing a funding round that puts its valuation at more than $400 million, its C.E.O. said.

The startup is supported by massive South Korean firms S.K. Telecom, memory-chip maker S.K. Hynix and S.K. Square, an investment company spun off of S.K. Telecom.

Sapeon designs artificial intelligence semiconductors for data centres, for example, running by cloud computing firms. These A.I. chips are required for A.I. applications requiring vast data processing.

Currently, U.S.U.S. firm Nvidia dominates this market. But several established players, such as AMD and startups like Sapeon, want to challenge Nvidia.

“A.I. solutions will grow a lot thanks to the evolution of A.I.A.I. services like ChatGPT,” Soojung Ryu, C.E.O. of Sapeon, told in an interview at the Mobile World Congress that aired on Wednesday.

ChatGPT is the viral chatbot made by OpenAI. It has stirred in the tech world, with companies from Google to Chinese firm Baidu scrambling to release their rivals. Technology executives say ChatGPT has put A.I. applications on the map.

Analysts at Bernstein anticipate ChatGPT to be a multi-billion dollar boon for chipmakers which looks to fuel these A.I. models.

“We would like to build this kind of system (A.I. chips) to have an opportunity for the business,” Ryu said.

Sapeon was created in 2016 by S.K. Telecom, one of South Korea’s most significant telecommunications firms. S.K. Telecom spun out the firm the previous year and raised outside investment.

Ryu said the company is raising money at a valuation of $400 million.

South Korean semiconductor firms, including Samsung and S.K. Hynix, have typically been okay in memory chips that go into devices like P.C.s Sapeon, among the first firms out of South Korea to try and crack the A.I. chip market.

Ryu stated that Sapeon is targeting the U.S.U.S. market, which would pit it against Nvidia. When asked if Sapeon could challenge Nvidia, Ryu answered, “yes.”

The nanometer diagram refers to the size of each transistor on a chip. Therefore, Sapeon has one chip on the market known as the X220. It is built on 28-nanometer technology.

The smaller the transistor, the more it can be packed into a single semiconductor. Therefore, reducing nanometer size can yield more powerful and efficient chips.

Ryu stated that the company would launch a 7-nanometer A.I. chip this year, manufactured by T.S.M.C., the world’s significant contract chipmaker. That would bring it closer to the present technology on demand.