(Bloomberg/Rachel Metz) — A two-month-old startup from the former head of artificial intelligence at Databricks Inc. has raised a seed round of funding from investors at a valuation of $4.5 billion for its effort to build a novel, more energy-efficient computer for AI.
Unconventional AI raised $475 million in a deal co-led by Andreessen Horowitz and Lightspeed Venture Partners, said Naveen Rao, who left Databricks in September and is chief executive officer of the startup. Other investors include Lux Capital and DCVC. Databricks and Amazon founder Jeff Bezos also participated in the round, and Rao said he invested $10 million of his own funds at the same terms as other investors.
The funding marks the first portion of a much larger financing of up to $1 billion, Rao said, as the …
(Bloomberg/Rachel Metz) — A two-month-old startup from the former head of artificial intelligence at Databricks Inc. has raised a seed round of funding from investors at a valuation of $4.5 billion for its effort to build a novel, more energy-efficient computer for AI.
Unconventional AI raised $475 million in a deal co-led by Andreessen Horowitz and Lightspeed Venture Partners, said Naveen Rao, who left Databricks in September and is chief executive officer of the startup. Other investors include Lux Capital and DCVC. Databricks and Amazon founder Jeff Bezos also participated in the round, and Rao said he invested $10 million of his own funds at the same terms as other investors.
The funding marks the first portion of a much larger financing of up to $1 billion, Rao said, as the company decides how much more to raise. Some of the details were reported previously by TechCrunch.
As demand for AI — in particular large language models, which power chatbots like OpenAI’s ChatGPT — skyrocketed over the past three years, the industry has largely bet on the idea of so-called scaling laws. Scaling laws hold that more computing power, data and larger models will inevitably pave the way for greater leaps forward in AI capabilities. But if demand continues to rise, computing and energy sources will continue to be constrained.
Rao sees these limitations as a challenge Unconventional AI can meet by rethinking the ways computers are built, and building more efficiently for AI in such a way that they can continue to scale with the amount of power that can be produced.
Unconventional AI is looking to biology for inspiration, as living organisms are always constrained by energy and can be quite efficient about using it. The human brain, for instance, can do tremendous work and runs on just about 20 watts of energy, Rao pointed out. (That’s enough energy to power, say, a small light bulb.) Rao said Unconventional AI is also focusing on the analog origins of computing, rather than the digital chips of today, and how the company may be able to use the intrinsic physics of semiconductors to run AI models.
“The next several years are going to be about trying out a number of ideas and prototypes and coming up with the exact paradigm of what we believe will scale most efficiently and cost effectively,” Rao said.
In addition to Rao, Unconventional AI has three other co-founders, who have deep roots in technology and academia: Michael Carbin, Sara Achour, and MeeLan Lee.
Rao, a serial entrepreneur who sold his data and AI analytics startup MosaicML to Databricks in 2023 for $1.3 billion, also co-founded Nervana Systems, a machine intelligence platform, which was acquired by Intel Corp. in 2016.
With the funding, he becomes the latest prominent tech executive whose nascent startup has a multibillion-dollar valuation. Others include former OpenAI Chief Technology Officer Mira Murati, whose company Thinking Machine Labs was last valued at $10 billion; OpenAI co-founder and former chief scientist Ilya Sutskever, whose startup Safe Superintelligence is valued at over $30 billion; and ex-Salesforce co-CEO Bret Taylor, whose two-year-old AI startup Sierra was also recently valued at $10 billion.
More stories like this are available on bloomberg.com
©2025 Bloomberg L.P.