TensorWave raises $100M to grow its AMD-powered cloud infrastructure

TensorWave, a data center provider building facilities primarily with AMD hardware, has raised $100 million as it seeks to further build out its data center infrastructure.

The funding round was led by Magnetar and AMD Ventures, and brings the company’s total capital raised to $146.7 million, according to Crunchbase. Maverick Silicon, Nexus Venture Partners and Prosperity7 also participated in the round.

It’s a precarious time for data center projects. Tariff-related price hikes on components like server racks and chips could contribute to overall data center build costs increasing by 5% to 15%, per an analysis by TD Cowen.

Investors are also wary of such projects accumulating too much capacity, particularly as the number of cheap AI services continues to grow. Overcapacity is reportedly one of the factors delaying OpenAI’s ambitious $500-billion Stargate data center project.

Las Vegas, Nevada-based TensorWave claims that it hasn’t seen a slowdown in business, however. The company is on track to end the year with run-rate revenue of more than $100 million, which would mark a 20x increase from a year earlier, according to CEO Darrick Horton (pictured above; in the middle).

Nvidia is the favored hardware vendor for data centers that are used for training and running AI models. But TensorWave embraced AMD early on, aiming to provide cloud services at lower prices.

TensorWave recently deployed a “dedicated training” cluster of around 8,000 AMD Instinct MI325X GPUs. The new capital will enable the company to grow that cluster, as well as expand headcount and support “operational growth,” said Horton.

TensorWave has a team of around 40 people at present, and expects headcount to reach over 100 by the end of the year.

“This $100 million funding propels TensorWave’s mission to democratize access to cutting-edge AI compute,” Horton added. “Our 8,192 Instinct MI325X GPU cluster marks just the beginning as we establish ourselves as the emerging AMD-powered leader in the rapidly expanding AI infrastructure market.”

Other data center providers placing bets on AMD’s AI chips range from startups like Lamini and Nscale to larger, more entrenched cloud providers such as Azure and Oracle.

Horton co-founded TensorWave with Jeff Tatarchuk (pictured above; on the left) and Piotr Tomasik (pictured above; on the right) in 2023. Tatarchuk had previously launched cloud vendor VMAccel with Horton, and sold another startup, Lets Rolo, to digital identity firm LifeKey. Horton co-founded crypto mining company VaultMiner Technologies, VMAccel’s corporate parent. As for Tomasik, he co-launched influencer marketer site Influential, and is the second co-founder of Lets Rolo.