Las Vegas-based startup secures $100M in funding

A Las Vegas-based cloud computing startup has broken a record for the largest Series A funding secured in Nevada history.

TensorWave, a Las Vegas-based AI GPU cloud computing company, has raised $100 million Series A funding, led by Magnetar and AMD Ventures, continued support from Maverick Silicon, Nexus Venture Partners, and new investor Prosperity7. With this new capital, TensorWave will be able to deploy more GPUs to fulfill its mission of “democratizing AI,” the company said.

This is not the first time TensorWave has made headlines — previously they raised the largest startup funding in Nevada history in October, landing $43 million in seed funding.

Founded in December 2023, by Darrick Horton, CEO, Jeff Tatarchuk, chief growth officer, and Piotr Tomasik, president and COO, the three saw a shortage in the data center GPU market and “we boldly thought what could we do to help this scenario?” Tomasik said. After launching, within the month they received an around $2.2 million infusion from StartupNV.

Currently, the company has raised $145 million in capital with an annual revenue of over $100 million. The company operates out of a coworking space at Town Square with around 43 employees, 35 of them based in Las Vegas.

What sets TensorWave apart is its usage of AMD Instinct™ MI325X GPUs, as opposed to the industry dominant Nvidia GPUs, the company said.

“We settled that on the fact that AMD had an advantage in memory and they had a path to catch up to Nvidia’s road map within the next five years,” said Tomasik, who is also a UNLV graduate. “So, we thought that would be a great way to get these data center GPUs into the hands of more companies, democratize it and just go after the market, because it’s huge.”

A GPU, or graphic processing unit, is a small chip used in computers that can perform thousands of tasks simultaneously and process large amounts of data. They help create pictures, 3D images and perform video playback on computers, among other things, and are essential for training AI models.

However, just one GPU can cost thousands of dollars and require large clunky equipment; and the bigger the company the more GPUs are needed.

What TensorWave does is allow for companies to utilize their thousands of GPUs for large processing. Their main focus is to help AI companies and startups train and use their AI models, while cutting down on time and equipment, while clients can pay as they go depending on how often and how much they use.

Through the use of AMD’s GPUs, TensorWave aims to break the monopoly Nvidia currently has on GPU and chipmaking industry as a whole.

“When you have a monopolistic player in the space, it’s hard to get access to the resources needed to break into building the next AI model training,” said Tomasik. “We’ve taken a very serious approach to trying to give early companies access to these really expensive GPUs that they just couldn’t be able to do with an Nvidia provider.”

For smaller companies, they use a credit system, offering usage in exchange for marketing collateral, among other things. Although for larger companies, TensorWave has negotiated sometimes up to $240 million contracts over certain time periods to help digest the smaller companies.

TensorWave currently has three data centers in Arizona, Pennsylvania and Florida, but the main goal as the company grows is raising capital, with Tomasik calling it “a capital hog.” For each server, eight AMD GPUs are needed, which costs around $250,000 — TensorWave has over 10,000 of them, with over 8,000 already deployed.

What’s next for TensorWave?

Last week, the company was approved for $210,000 in abatements from the Nevada Governor’s Office of Economic Development, with plans generate to 60 new jobs at an average wage of $58 per hour.

“I’ve actually viewed it as an asset to be in Vegas, because I can lure people away from snowy conditions in the rest of the country,” said Tomasik. “It was an uphill battle to convince to move to Las Vegas. This time around, it’s been a lot easier.”

Next for the company is another round of funding, with a goal to deploy an additional 20,000 GPUs.

“I’ve worked in the tech space for 21 years. It is amazing watching this breed and grow here from Las Vegas,” said Tomaik. “Watching the startup ecosystem right now, this is like a Cinderella story.”

Contact Emerson Drewes at edrewes@reviewjournal.com. Follow @EmersonDrewes on X.