Topics
Latest
AI
Amazon
Apps
Biotech & Health
Climate
Cloud Computing
Commerce
Crypto
Enterprise
EVs
Fintech
Fundraising
Gadgets
Gaming
Government & Policy
Hardware
Layoffs
Media & Entertainment
Meta
Microsoft
Privacy
Robotics
Security
Social
Space
Startups
TikTok
Transportation
Venture
More from TechCrunch
Staff
Events
Startup Battlefield
StrictlyVC
Newsletters
Podcasts
Videos
Partner Content
TechCrunch Brand Studio
Crunchboard
Contact Us
Why the first GPU financiers are turning to inference chips in a $400 million deal
General Compute, an AI inference cloud startup, has landed a $400 million loan from Upper90, a tech investment firm. It might be the first deal to put up inference-specific chips as collateral — chips built to run already trained AI models quickly and efficiently, rather than the more expensive chips used to build the models in the first place.
The financing is the latest signal that markets are responding to concerns over the price of AI tools and tokens by turning to infrastructure that runs open source models more cheaply than the newest LLMs from frontier labs.
Founded by CEO Finn Puklowski and CTO Jason Goodison, General Compute raised a $15 million seed round in May to build an inference neocloud around silicon from SambaNova, an Intel-backed chipmaker. (Neoclouds are purpose-built for AI workloads, unlike the general-purpose infrastructure offered by traditional hyperscalers like AWS or Azure.)
The company’s SN50 chips are designed for inference. They’re power-efficient and don’t require expensive water-cooling systems, which means they can be deployed more quickly than GPUs across a larger variety of data centers. General Compute says the new chips will provide 16 times faster inference than GPU-based clouds.
The challenge is getting a lot of these chips, especially when you’re a brand-new company.
Upper90 co-founder and CEO Billy Libby, a former Goldman Sachs quantitative trader, had a playbook for this: In 2021, his firm financed GPU purchases by Crusoe, the energy-focused data center startup, which he believes was the first loan against the value of advanced chips.
Traditional lenders eschewed such deals at the time because of the risks and uncertainties around GPU depreciation. But as CoreWeave made chips-backed loans into a business model and then the basis of a blockbuster IPO, this kind of financing has become common.
“When we financed Nvidia GPUs as the first group to do that, the market was inefficient,” Libby told TechCrunch. “We could really put together something as an early participant, and kind of get compensated for the risk.”
Now that GPUs are comparatively well understood and perhaps over-bought, Upper90 is turning to companies like General Compute to ride the next wave of the AI boom. “We think open source models are going to be important, and we went and looked for a player last year that was in inference,” Libby said. “Everyone doesn’t need a supercomputer, but they do need inference and AI.”
That thesis has been growing stronger, with companies that provide access to open models, like OpenRouter and Fireworks, raising new rounds at huge valuations. New models like Kimi’s K3 have proven to compete with the latest releases from Anthropic and OpenAI on coding benchmarks. And new chipmakers like Groq and Cerebras have drawn interest from acquirers and public markets alike.
General Compute’s ability to access chips outside of Nvidia’s ecosystem matters for the same reason. TensorWave, another AI infrastructure company, is making a similar bet on a partnership with AMD. As more alternatives to Nvidia emerge, compute providers that aren’t locked into Nvidia deals may have an advantage in providing cost-efficient inference.
“There are a bunch of chips that are starting to scale that have amazing [total cost of ownership], or that can operate much faster than Nvidia, but there’s not too many buyers for them,” Puklowski said. “By getting together with Upper90, this is not just, ‘a cool startup got some money to buy some compute.’ Like, this is the first signal of capital organizing itself and the fragmenting of Nvidia’s monopolistic dominance.”
Topics
When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.
we may earn a small commission
Senior Reporter
Last chance to save up to $190 on TechCrunch Founder Summit. Join 1,000+ founders and VCs at all stages for real-world scaling insights and connections that move the needle.Savings end June 26, 11:59 p.m. PT.
Most Popular
Tesla driver in fatal Texas crash pressed accelerator 100%, NTSB confirms
Sean O'Kane
Tesla driver in fatal Texas crash pressed accelerator 100%, NTSB confirms
Tesla driver in fatal Texas crash pressed accelerator 100%, NTSB confirms
Tesla driver in fatal Texas crash pressed accelerator 100%, NTSB confirms
Sean O'Kane
OpenAI’s first hardware device is reportedly a screenless speaker that can move
Lucas Ropek
OpenAI’s first hardware device is reportedly a screenless speaker that can move
OpenAI’s first hardware device is reportedly a screenless speaker that can move
OpenAI’s first hardware device is reportedly a screenless speaker that can move
Lucas Ropek
Anthropic’s newest ad is creeping people out
Lucas Ropek
Anthropic’s newest ad is creeping people out
Anthropic’s newest ad is creeping people out
Anthropic’s newest ad is creeping people out
Lucas Ropek
Satya Nadella has issued a shocking warning to companies using AI
Julie Bort
Satya Nadella has issued a shocking warning to companies using AI
Satya Nadella has issued a shocking warning to companies using AI
Satya Nadella has issued a shocking warning to companies using AI
Julie Bort
The wildest allegations in Apple’s trade secrets lawsuit against OpenAI
Sarah Perez
The wildest allegations in Apple’s trade secrets lawsuit against OpenAI
The wildest allegations in Apple’s trade secrets lawsuit against OpenAI
The wildest allegations in Apple’s trade secrets lawsuit against OpenAI
Sarah Perez
Anthropic starts localizing Claude pricing for India, its biggest market after the US
Jagmeet Singh
Anthropic starts localizing Claude pricing for India, its biggest market after the US
Anthropic starts localizing Claude pricing for India, its biggest market after the US
Anthropic starts localizing Claude pricing for India, its biggest market after the US
Jagmeet Singh
Meta removes controversial AI feature on Instagram after backlash
Lucas Ropek
Meta removes controversial AI feature on Instagram after backlash
Meta removes controversial AI feature on Instagram after backlash
Meta removes controversial AI feature on Instagram after backlash
Lucas Ropek