Unconventional AI buys Israeli chip startup NeuReality to speed product development

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SAN FRANCISCO, Oct 26 : Unconventional AI, the US hardware startup that launched less than a year ago with a $4.5 billion valuation, said on Monday that it is buying Israeli chip startup NeuReality for an undisclosed sum in a cash-and-stock deal.

Unconventional AI raised $475 million in December and is led by Naveen Rao, who previously sold chip startup Nervana to Intel for more than $400 million and AI software startup MosaicML to Databricks for $1.3 billion. It is backed by prominent Silicon Valley venture firms Andreessen Horowitz and Sequoia, along with Amazon.com founder Jeff Bezos, among others.

Mountain View, California-based Unconventional AI's goal is to develop AI chips that are 1,000 times more energy efficient than current offerings by using concepts from biological systems. The company is focusing on what Rao calls a "dynamical systems" approach, in which simple computing elements interact with simple rules and evolve over time to reach a result, rather than following programmed step-by-step logic as conventional computing chips do.

In an interview, Rao said that when Unconventional AI raised its $475 million war chest of cash, the company expected to take three years in research and development and take five years to develop a product. 

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But by using AI tools to speed its work, Unconventional AI already has developed its first test chip and is nearing completion of its second, prompting the company to look for an engineering team with experience delivering finished products, Rao said.

Founded in 2019 by Moshe Tanach, formerly of Marvell Technology and Intel, Tzvika Shmueli and Yossi Kasus, NeuReality had already developed several advanced AI chips.

"Things have gone a lot faster than anticipated," Rao told Reuters. "We need people who can go execute and build products and scale them. We built up the research bones and now we've got to build up the production bones." 

Rao, who served on NeuReality's board, said about 40 people will join Unconventional AI as part of the deal, and that Unconventional AI will maintain a presence in Israel.

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