Graphics processing units (GPUs), which are the chips that most AI models are run on, need a lot of power. Goldman Sachs predicts that AI will cause a 160% rise in power demand by 2030. This is because GPUs are being used in data centers more and more quickly.
Vishal Sarin, an analog and memory circuit creator, says the trend can’t last. After more than ten years working in the chip business, Sarin started Sagence AI (it used to be called Analog Inference) to make GPU alternatives that use less power.
“The uses that could really make AI computing common are limited because the machines and computers that process the data can’t reach the needed level of performance,” Sarin said. “Our goal is to break through the limits of performance and cost in a way that is good for the environment.”
Software to program these chips is made by Sagence. They also make chips and tools for running AI models. There are a lot of companies that make special AI hardware, but Sagence’s chips are different because they are analog instead of digital.
A lot of chips, including GPUs, keep data digitally as strings of ones and zeros. Analog chips, on the other hand, can use a variety of values to describe data.
It’s not a new idea to have analog chips. From about 1935 to 1980, they were at their best, working to plan the North American electrical grid and other engineering feats. On the other hand, the problems with digital chips are making traditional once more appealing.
One reason is that digital chips need hundreds of parts to do some tasks that analog chips can do with just a few modules. Digital chips also have to move data back and forth between memory and processors, which slows things down.
“This old way of building architecture is used by all the major legacy AI chipmakers, and it’s slowing down the adoption of AI,” Sarin said.
Because “in-memory” analog chips like Sagence’s don’t move data from memory to processors, they might be able to finish jobs faster. The data density of analog chips can be higher than that of digital chips because they can store data using a wider range of values.
But there are some problems with analog tech. For instance, it might be harder to get very precise results with analog chips since they need to be made with more care. Plus, it’s often harder to control them.
Sarin thinks that Sagence’s chips will work with digital chips, not instead of them, to speed up certain apps in servers and phones.
He said, “Sagence products are made to get rid of the power, cost, and latency problems that come with GPU hardware while still providing high performance for AI applications.”
As Sarin put it, Sagence is working with “multiple” users to get ready for the launch of its chips in 2025. The company wants to compete with EnCharge and Mythic, two other AI analog chip companies. “Right now we’re putting together system-level products based on our core technology and making sure they work with existing infrastructure and deployment scenarios,” he said.
In the six years since it started, Sagence has raised a total of $58 million from investors such as Vinod Khosla, TDK Ventures, Cambium Capital, Blue Ivy Ventures, Aramco Ventures, and New Science Ventures.
The startup now wants to raise more money to hire more people to join its 75-person team.
Sarin said, “Our cost structure is good because we’re not trying to meet performance goals by switching to the newest ways to make chips.” “That’s very important to us.”
Things could go well for Sagence right now. According to Crunchbase, funding for semiconductor startups seems to be picking up again after a slow year in 2023. VC-backed chip startups raised almost $5.3 billion from January to July. This is a lot more than the $8.8 billion they raised all of last year.
Since this is the case, making chips is an expensive business. The new Trump administration’s plans for foreign sanctions and tariffs will make things even harder. It’s also hard to get users who are “locked in” to ecosystems like Nvidia’s to switch. After failing to get a strong foothold in the market, AI chipmaker Graphcore filed for bankruptcy last year. The company had raised almost $700 million and was once worth close to $3 billion.
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If Sagence wants to be successful, it needs to show that its chips really do use a lot less power and work better than other options. It also needs to get enough venture capital funding to make a lot of them.
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