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Korean AI Chip Startup Raises $62 Million Round Led By Ex-Samsung Executive’s PE Firm

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DeepX, a South Korean AI chip startup, has raised a $62 million Series C round at a $500 million valuation. The round brings its total funds raised to $80.5 million.

The Series C was led by Skylake Equity Partners, which contributed half of the new funding round. The rest came from South Korean private equity firms AJU IB Investment, BNW Investment and Timefolio Asset Management.

Skylake Equity Partners, another South Korean private equity firm, is founded and led by Chin Dae-je, a former Samsung Electronics executive who was instrumental in turning the company into the world’s top memory-chip maker by revenue.

“Skylake invests in the best AI semiconductor companies,” says Lokwon Kim, founder and CEO of DeepX, in a video interview. “They asked to explain DeepX’s technical details and they actually understand.” Skylake’s previous investments include billionaire Kwak Dong Shin’s chip equipment-maker Hanmi Semiconductor and billionaire Lee Su-jin’s travel superapp Yanolja.

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“We have met many big companies in South Korea, too,” adds Kim. “But we didn’t want to receive the investment from strategic investors right now because we want to provide our technology to all companies.”

The new funds will be used to develop power-efficient AI chips and begin mass producing them by the end of this year. DeepX’s chips are designed to run AI models on the device itself, without the need for a network connection to a cloud, which reduces latency and provides greater security. The chips can be used in cars, factories, robots, security cameras and electronic devices.

“Right now, AI is huge and people want to integrate that capability into devices,” says Kim, who worked at Apple before founding DeepX in 2018. “If electronic devices consume a lot of power, then it will overheat and the battery life will be very short, which can lead to critical issues for the device.” Kim claims DeepX’s chip will be 10 to 20 times more power efficient than Nvidia’s.

More than 100 companies around the world have expressed interest in DeepX’s AI chips, says Kim, including Hyundai Motors Robotics Lab and Posco DX, the digital technology unit of South Korean steel giant Posco.

Of course, DeepX is not the only company designing power-efficient AI chips for devices. Its competitors include Israel’s Hailo and SiMa.ai in Silicon Valley, which both raised funding last month. Hailo raised $120 million from Israeli investors, while SiMa.ai raised $70 million from the likes of “Tiger Cub” hedge fund Maverick Capital, billionaire Steve Cohen’s Point72 and Dell Technologies Capital.

DeepX is the latest AI-related startup in the semiconductor hub of South Korea to raise funding even as venture capital deals slow globally. In recent months, SqueezeBits, which makes AI models faster and cheaper to run, raised almost $2 million in pre-Series A funding, and Rebellions, another AI chip startup, raised $124 million in Series B funding, bringing its total funding to $210 million—making it the most capitalized startup of its kind in the country.

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