Horizon Robotics becomes highest valued AI chip startup
AI chip startups are the hottest investment space in Artificial Intelligence startups in recent years. This is a huge positive for investment in semiconductor startup space as the investment had almost dried out in the 2000’s. Developing a new chip is an extremely costly affair where design and manufacturing costs run over 100 million USD. In venture capital, where investors expecting 10X returns are common, this offered a very low potential ROI unless the chip was a paradigm breakthrough.
But, the emergence of AI has reversed the fortunes of AI-based chip startups in the last few years. AI which was primarily focused on the software side in the earlier days has progressed so much, that further development demands much larger processing power. Even today this is achieved using GPUs or FPGAs, which sufficed the growing processing power needs of the even demanding AI applications. But, around 2014, there was an emergence of a few startups making chips which had specialized architecture for AI applications. The sector got into mainstream attention in 2016 when Intel acquired Nervana Systems, a 2-year-old AI chip startup for over USD 400 million.
From then, multiple semiconductor majors, FPGA companies as well as new age internet companies have announced their intentions of developing AI chips. Google announced the Tensor Processing Unit (TPU) which is a specialized AI accelerator in 2016. It has updated the chip almost every year since then and has currently announced the TPU 3.0 as well as edge TPU. Intel has made AI its major focus area and has made a string of acquisitions in this area and sees as the next big growth driver for the semiconductor industry. A number of startups raised large funding rounds at sky-high valuations in 2018. Companies like Wave computing, Habana SambaNova and Groq based in the US while Graphcore based in the UK are all valued in multiples of 100 million USD.
China which aims at achieving self-sufficiency in key technology areas in the Made in China 2025 plan, is considering this as a major opportunity to increase its footprint in the semiconductor industry. With a large electronics manufacturing base, China sees the dependence on semiconductor from other countries as a major challenge going forward. The Chinese government has both incentivized and actually funded semiconductor companies in recent times.
The year 2018 saw the emergence of Chinese AI chip unicorns. The USD 600 million mega funding round of Horizon Robotics which was announced a couple of days back is the latest step in that direction. This company press release claims that this values the Beijing based startup at USD 3 billion making it the highest valued AI chip startup in the world. The round was led by South Korean conglomerate SK group, semiconductor memory manufacturer SK Hynix and many Chinese car-maker backed VC funds. Interestingly, Horizon also lists Intel as one of its backers.
Horizon robotics is focused on the self-driving car market and has already released Journey 1.0, which enables Level 0 – Level 2 high-performance Advanced Driver Assistance System (ADAS); and the Sunrise 1.0 processor, which empowers vision processing tasks on edge devices. It late also launched the Horizon Matrix Autonomous Driving Computing Platform to provide high-performance sensing abilities for Level 3 and Level 4 autonomous driving systems. At CES 2019, it also announced NavNet, which is a crowd-sourcing HD map solution for autonomous driving. Its edge AI cameras based on its Sunrise processor enable face detection and tracking with compute on the edge itself. It also has an Xforce platform targeting smart city and retail applications.
Horizon Robotics was started in 2015 by Kai Yu, who led the Baidu Institute of Deep learning earlier. He aims to make the company the ‘Intel of edge computing’. Horizon has significant automotive partnerships with almost all the Chinese car makers as well as global auto OEMs and tier 1s like Audi and Bosch. There are other AI chip unicorns in China as well. Cambricon, which is also a Beijing based startup, raised a large series B round in 2018 valuing it at USD 2.5 billion. Another Chinese AI chip company, Hangzhou Nationalchip also received a major funding round earlier this week from a Chinese state-backed fund. Apart from these, the Chinese technology majors – Baidu and Alibaba have already announced their intentions to develop AI chips towards the end of 2018. It is clear that China sees this sector as a major opportunity to gain a foot in the semiconductor industry while also not relying on foreign players for its plans on artificial intelligence and autonomous cars. Horizon robotics becoming the largest funded AI chip startup in the world is a major step for China in that direction.
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Image Courtesy : www.horizon.ai