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AI chip company DEEPX gets $80M Series C at a value of $529M.

DEEPX is a South Korean startup specialising in on-device AI chips (NPUs, or neural processing units). They develop both hardware and software solutions for a wide range of AI applications on electronic devices. This week, the company made an exciting announcement. They have successfully raised an impressive $80 million (KRW 108.5 billion) in a Series C round, valuing the company at a remarkable $529 million (KRW 723 billion). This valuation represents a significant surge of over eight times compared to their previous Series B funding of approximately $15 million in 2021. 

The startup will use the Series C funding, bringing its total raise to approximately $95 million, to mass produce its first line of products, DX-V1, DX-V3, DX-M1, and DX-H1. The startup plans to manufacture these products in late 2024 and distribute them worldwide. The startup plans to utilise the new funding to accelerate the development and release of its upcoming on-device solutions, which will feature the next generation of large language models (LLMs). 

Lokwon Kim, the CEO, founded DEEPX in 2018. He has experience at prestigious companies like Apple, Cisco Systems, the IBM Thomas J. Watson Research Centre, and Broadcom.

A recent report projects that global edge AI, also known as on-device AI, will grow from $11.98 billion in 2021 to $107.47 billion by 2029. “The market for on-device AI, excluding edge servers, necessitates the implementation of AI capabilities without relying on servers or the cloud,” Kim explained to Eltrys. The on-device AI market is experiencing significant growth, driven by advancements in computer vision technology. This includes the ability to recognise faces and voices, enhance smart mobility, enable robotics, connect to the internet of things, and strengthen physical security systems. 

According to Kim, if mass production kicks off this year, potential customers like end-product manufacturers will have the opportunity to bring DEEPX’s AI chips into the market by 2025. 

There are several other companies that have also developed AI chip solutions, and DEEPX is one of them. With a workforce of approximately 65 employees, DEEPX has made significant strides in this field. The Korean outfit is in competition with Hailo, which recently secured a $120 million funding round; SiMa.ai, which also closed a $70 million funding round in April; and Axelera, a Belgium-based AI chip startup that successfully raised $27 million in 2022. 

Kim highlighted his company’s unique selling points, which encompass cost efficiency, energy consumption efficiency, and the All-in-4 AI Total Solution. This comprehensive solution caters to a wide range of AI applications. The All-in-4 AI solutions offered are DX-V1 and DX-V3, specifically developed for vision systems in various applications such as home appliances, surveillance cameras, robot vision, and drones. Additionally, there are DX-M1 and DX-H1, designed to cater to AI computing boxes, AI servers, smart factories, and AI booster chips. According to Kim, DEEPX currently has over 259 pending patents in the United States, China, and South Korea. 

“Nvidia’s GPGPU-based solutions provide exceptional cost-effectiveness for large language model services such as ChatGPT.” “The power consumption of GPUs in operation has now reached levels that surpass the electrical energy consumption of an entire country,” Kim stated. We anticipate that the synergy between server-scale AI and on-device large AI models will significantly decrease energy consumption and costs, providing a more efficient alternative to solely relying on data centres.

The startup is currently working with over 100 potential clients and strategic partners, including Hyundai Kia Motors Robotics Lab and Korean IT company POSCO DX, to test DEEPX’s AI chip capabilities. Although the startup has no customers yet, it is actively collaborating with these partners to explore the potential of their technology.

SkyLake Equity Partners, a private equity firm based in South Korea, took the lead in the most recent investment round. A former president of Samsung LED and Samsung Electronics’ memory chip unit founded BNW Investments, a Korean private equity firm, to join them. This round also included AJU IB and Timefolio Asset Management, a previous backer.

Juliet P.
Author: Juliet P.

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