Toronto's Untether AI employee held a tip in the office in June 2024. Advanced Micro Devices signed a deal to access the talent of a Toronto-based startup as the company ended.Jessica Lee/The Globe and Mail
The promising Canadian chip startup Untether Ai Corp. has been rolled up because it didn't raise funds earlier this year, and its engineering employees will be transferred to American Company Advanced Micro Devices AMD-T.
This arrangement is known as “Acquihire,” where one company attacks a transaction with another company in order to access talent on behalf of a product or service.
Toronto-based Untether designs computer chips designed for artificial intelligence applications such as self-driving cars, robots and drones, saying its products are far more energy efficient than other products on the market.
However, two sources familiar with the issue have found that it was too late for the hardware market to use generative AI applications such as Openai's ChatGpt and struggled to compete with the dominance of Nvidia Corp. NVDA-T in the chip market. The economic uncertainty caused by President Donald Trump's tariff agenda has contributed to the difficulty of raising new funds from investors this year, one source said.
Globe and Mail does not identify sources as they are not authorized to discuss the issue.
In a statement on its website Thursday, Utether said it has signed a “strategic agreement” with California-based Chipmaker AMD. “Today marks the end of Untether Ai's journey, and we are proud of the pioneering research that underpinned our work,” the statement read. The company added that it will no longer offer or support hardware and software products.
In a statement in the statement, AMD said CRN has obtained “a talented team of AI hardware and software engineers” from Untether.
One source said the value of the transaction is likely to be less than US$100 million, depending on the number of employees agreeing to join AMD. Sources added that Meta Platforms Inc., which is working on custom chips for AI applications, is also in talks with Untether.
It is not clear what will happen to Untether's intellectual property, which is not part of the transaction, but sources said they can sell separately.
Neither Untether nor AMD immediately responded to requests for comment.
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According to a LinkedIn profile, Untether's CEO Chris Walker left the company in May. He did not reply to Earth or the mail.
Untether was founded in 2018 and was funded by Intel Capital, Radical Ventures, GM Ventures and Canada Pension Plan Investment Board. The company has raised approximately $150 million. This means that, given the potential value of the transaction, investors may not recover the total amount they invested. However, losses depend on when investors first acquire the funds.
The company's products were built on the research of Martin Snell Grove, a former University of Toronto professor at the University of Toronto, who pioneered different computer chip architectures.
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Untether pursued the self-driving car market and other systems that use the form of AI known as computer vision, which includes the detection and interpretation of objects in video and imagery. However, the world of AI changed in the second half of 2022 with the release of ChatGPT. This is because companies became obsessed with generated AI and chatbots. Nvidia has become the most valuable public company in the world as large tech companies scrambled to buy chips to install internal data centers to train AI models.
Untether aimed to compete with Nvidia in a much larger market to enhance its AI model. This is a term used after building an AI model, such as asking ChatGpt questions.
Independent testing gave Untether's products a high mark. Mlcommons, the industrial and academic consortium that benchmarks AI Systems, discovered last year that one of Untether's chips is six times more energy efficient and low latency than competing products in one test category.
However, especially given Nvidia's size and reputation, it may have been too slow to push chips housed in data centers for generative AI into the market. The California-based company is worth nearly USD 3.5 trillion.
