although Sam Altman reappointed shortly after being fired last month as the OpenAI the chief executive officer of theBut even during his absence, the company continued to develop ChatGPT, he is still expected to gain.During Altman's tenure as CEO, OpenAI reportedly signed a letter of intent for a program to provide a new service to a company called Rain AI.Startupsinvested $51 million in AI chips, and the AMr. Litman himself has made a personal investment in the company..
Less than a mile from OpenAI's headquarters, Rain is working on a chip called a neuromorphic processing unit (NPU) designed to mimic the properties of the human brain, according to a copy of the agreement seen by WIRED and disclosures Rain made to investors this year.In 2019, OpenAI signed a nonbinding agreement committing to spend $51 million when the chip becomes available to Purchase.Rain told investors that Altman has personally invested more than $1 million in the company.This letter of intent has not been previously reported.
Investment documents show that Rain could deliver its first hardware to customers as early as October of next year, according to the company.absoluteLeave a comment on this.
The letter of intent between OpenAI and Rain shows how Altman's personal investment network became intertwined with his responsibilities as OpenAI's CEO. His previous role as CEO of the startup incubator Y CombinatorLeadersHelped Altman become one of Silicon Valley's most recognizable deal aggregators, invested in dozens of startups, and served as an entrepreneur with the globalmaximumbroker between the companies. But the distraction and intertwining of his many pursuits led in part to his recent dismissal from OpenAI's board of directors for not being forthcoming enough in his communications with the board, according to people involved in the situation but not authorized to discuss it.
Rain's deal also underscores OpenAI's willingness to spend large sums of money to secure the supply of chips needed to support groundbreaking AI projects.Altman openly complained about the 'brutal crunch' and 'eye-watering' cost of AI chips.OpenAI leverages the powerful cloud services of its main investor, Microsoft, but often shuts down some of ChatGPT's features due to hardware limitations. According to Altman's blog post in a closed-door meeting with developers, theHe has said the pace of AI progress may depend on new chip designs and supply chains.
Rain touted its progress to potential investors earlier this year, anticipating that it could 'flow' a test chip this month, a standard milestone in chip development that refers to a design ready for manufacturing. But the startup recently rearranged its leadership and investors after a U.S. government interagency committee tasked with monitoring investments reportedly asked Prosperity7 Ventures, a Saudi Arabia-linked fund, to sell its stake in the company due to national security risks. The fund led a $25 million financing round announced in early 2022 by Rain.
Bloomberg last Thursdayfirstreported that the fund was forced to pull out, and documents seen by WIRED suggest that this could add to Rain's challenge of bringing its novel chip technology to market, delaying the date by which OpenAI would honor its $51 million pre-purchase order. Silicon Valley-based Grep VC acquired the shares; neither the fund nor the Saudi fund responded to requests for comment.
U.S. concerns about Prosperity7's deal with Rain also raise questions about another Altman effort to increase the world's supply of AI chips. According to two people who sought anonymity to discuss the private conversationsAltman has spoken with Middle Eastern investors in recent months about raising capital to launch a new chip company that would help OpenAI and other companies reduce their reliance on NVIDIA GPUs and specialized chips from Google, Amazon, and a handful of smaller vendors.
Founded in 2017, Rain claims that its brain-inspired NPUs will bring developers (like OpenAI) potentially 100x the computing power and 10,000x the energy efficiency when used for trainingThese developers primarily use graphics chips provided by NVIDIA.
Altman led Rain's seed funding round in 2018, which the company said came a year before OpenAI agreed to spend $51 million on its chips. Rain currently has about 40 employees, including experts in AI algorithms and traditional chip design, according to disclosure documents.
The startup appears to have quietly changed CEOs this year, now listing founding CEO Gordon Wilson as an executive advisor on its website, formeradvancedAttorney William Passo was promoted to Chief Executive Officer.
Wilson confirmed his departure in a LinkedIn post on Thursday, but did not provide a reason. He wrote:"Rain is about to release a product that will define the new AI chip market and significantly disrupt the existing market."Wilson.absoluteLeave a comment on this story.
According to an October investor notice seen by WIRED, the company will be looking for an industrySeniorpersonspermanentReplacing Wilson.
Rain's initial chips are based on the RISC-V open-source architecture backed by Google, Qualcomm and other tech companies, and are intended for so-called edge devices such as cellphones, drones, cars and robots that are far from data centers.Rain aims to provide a chip that can simultaneously train machine algorithms and run them when they're ready to be deployed.Most edge chip designs today, such as those in smartphones, focus primarily on the latter, namely inference. There is no way to know how OpenAI will use the Rain chip.
Rain has claimed to have worked with companies such as Google, Oracle, Meta, Microsoft, and Amazonadvancednegotiations to sell its systems. Microsoft declined to comment, and the other companies did not respond to requests for comment.
The Prosperity7-led financing announced last year brings Rain's total funding as of April 2022 to $33 million. According to investor disclosures, that's enough to sustain operations through early 2025 and raise the company's valuation to $90 million, excluding new cash raised. The filing cites Altman's personal investment and Rain's letter of intent with OpenAI as reasons to support the company.
In a press release issued for fundraising last year, Altman praised the startup's commitment to launching a prototype in 2021, saying it "could dramatically reduce the cost of creating powerful AI models and hopefully one day help enable true general-purpose AI."
Last year's funding round, led by Prosperity7, brought Rain's total funding through April 2022 to $33 million. That's enough to keep the company running through early 2025 and value the company at $90 million, excluding new cash raised, according to disclosures to investors. Altman's personal investment and Rain's letter of intent with OpenAI were mentioned in the filing as reasons to back the company.
In a press release issued last year for the fundraising, Altman praised the startup for producing a prototype in 2021 and said it "could dramatically reduce the cost of creating powerful AI models, hopefully one day helping to realize true general-purpose AI."
Prosperity7's investment in Rain has attracted the interest of the U.S. interagency Committee on Foreign Investment in the United States (CFIUS), which has the authority to cancel transactions deemed to be a threat to national security.
CFIUS disclosures show it reviews hundreds of transactions a year, and in the few cases where there are concerns it typically enacts protections, such as barring foreign investors from board seats. It's unclear why the commission is calling for a complete divestment from Rain.
Three lawyers who regularly handle sensitive transactions said they could not recall any previous Saudi Arabian deals being blocked by CFIUS altogether. "Divestment itself has been fairly rare over the last 20 years, mainly as a remedy for foreign investors," said Luciano Racco, co-chair of the international trade and national security practice at the law firm Foley Hoag.
OpenAI may need to find partners with deep pockets if it wants to have some control over its hardware needs.Rivals Amazon and Google have spent years developing their own custom chips for AI projects and could use revenue from their profitable core businesses to fund them. altman refused to rule out the possibility of OpenAI making its own chips, but that would require a lot of money as well.