TensorWave announces AMD-powered cloud platform targeting breakup of Nvidia AI compute dominance.
Nvidia notched $30 billion in revenue last fiscal quarter, driven largely by the AI industry's insatiable demand for GPUs—chips essential for training and running AI models that contain thousands of cores performing parallel linear algebra. TensorWave, a company founded late last year, is challenging this dominance by launching a cloud that exclusively offers access to AMD hardware for AI workloads. "We recognized an unhealthy monopoly at work — one that was starving end-users of compute access and stifling innovation in the AI space," CEO and co-founder Darrick Horton told TechCrunch. "Motivated by our desire to democratize AI, we set out to provide a viable alternative and restore competition and choice."
The three co-founders came together through an unlikely intersection of professional history and leisure. Pickleball initially brought Horton together with his two other co-founders, Jeff Tatarchuk and Piotr Tomasik, who were longtime pickleball doubles partners. After a match one day, Tomasik and Tatarchuk invited Horton, a former colleague of Tatarchuk's, to their favorite Las Vegas watering hole, where "as the conversation unfolded, we discussed the monopolistic grip on GPU compute capacity, which was leading to supply constraints," Horton said. "This realization led to the formation of TensorWave." Tatarchuk previously co-founded cloud vendor VMAccel with Horton and sold another startup, CRM developer Lets Rolo, to digital identity firm LifeKey. Horton, who holds bachelor's degrees in mechanical engineering and physics, once worked at Lockheed Martin's Skunk Works R&D division before co-founding VaultMiner Technologies. Tomasik co-launched Lets Rolo alongside Tatarchuk and is also a co-founder of influencer marketer site Influential, which French PR firm Publicis acquired for $500 million in July.
TensorWave is headquartered in Las Vegas, an unusual choice for a cloud infrastructure startup, but Horton believed the city had potential. "We thought that Vegas had the potential to become a thriving technology and startup ecosystem," he said. According to Dealroom.co data, Las Vegas is home to just over 600 startups employing more than 11,000 people, which attracted over $4 billion in investments in 2022. Energy costs and overhead are lower in Vegas than in many major U.S. cities. Both Tomasik and Tatarchuk have deep ties to the city's VC community: Tomasik was previously a GP at Vegas-based seed fund 1864 Fund and now works with StartUp Vegas and Vegas Tech Ventures, while Tatarchuk is an angel investor at Fruition Lab, a Vegas incubator. These connections helped bootstrap TensorWave into becoming one of the first clouds to market with AMD Instinct MI300X instances for AI workloads.
TensorWave delivers setups with dedicated storage and high-speed interconnects upon request, renting GPU capacity by the hour while requiring a minimum six-month contract. "In the cloud space as whole, we are in good company," Horton said. "We see ourselves as complementary, offering additional AI-specific compute at competitive price-to-performance." The market for startups building low-cost, on-demand GPU-powered clouds is booming. CoreWeave recently raised $1.1 billion in new funds and $7.5 billion in debt while signing a multi-billion-dollar capacity deal with Microsoft. Lambda Labs secured a special purpose financing vehicle of up to $500 million in early April and is reportedly seeking an additional $800 million. The nonprofit Voltage Park, backed by crypto billionaire Jed McCaleb, announced last October it is investing $500 million in GPU-backed data centers. Together AI landed $106 million in a Salesforce-led round in March.
On pricing, Horton notes that the MI300X is significantly cheaper than Nvidia's most popular GPU for AI workloads, the H100, allowing TensorWave to pass savings on to customers. To beat the more competitive H100 plans, TensorWave's pricing would need to come under approximately $2.50 per hour—a challenging but not inconceivable feat.