MosaicML founder takes another swing at AI chips

Naveen Rao, a notable figure in the technology landscape, is once again planning a disruption with his latest venture, Unconventional, Inc. Having recently departed his role as the head of the intelligence division at Databricks, a company currently valued at $100 billion, Rao is embarking on a project that aims to fundamentally redefine computing itself. The audacious goal is to create a new type of computer, described by Rao as a new substrate for intelligence that is as efficient as biology. 

Whispers in the industry suggest the ambition is matched by the capital backing. Sources familiar with the discussions indicate that Unconventional, Inc. is in talks to raise a monumental $1 billion at a $5 billion valuation. This substantial commitment underscores the industry’s faith in Rao’s vision.

High-stakes financial backing

The initial funding is reportedly being led by the powerhouse venture firm Andreessen Horowitz, with additional significant participation from Lightspeed and Lux Capital. Furthermore, Databricks, which acquired Rao’s previous company just last year, is also rumoured to be throwing its weight behind the new endeavour, according to earlier reports.

Rao is not waiting for the full $1 billion to materialise before putting his plans into action. He has already secured hundreds of millions of dollars and intends to commence building immediately. The rest of the capital is planned to be raised in structured instalments, a staged financing method known as a tranched round. This strategic approach allows the company to progress rapidly while finalising the full investment.

Rao’s big bet

Rao’s public comments offer a glimpse into the profound scale of his ambition. On a social media platform last week, he confirmed the startup’s name and offered a mission statement: “Rethinking the foundations of a computer to build a new substrate for intelligence that is as efficient as biology. Brain Scale Efficiency without the biological baggage!”

This vision is set to place Unconventional, Inc. in direct competition with established giants. Sources indicate that the new machine is being designed as an end-to-end intelligence solution, encompassing both custom silicon chips and the necessary server infrastructure. This means Unconventional, Inc. aims to challenge the dominance of existing hardware leaders by offering a novel, purpose-built solution.

A history of disruptions

Rao’s track record lends serious credibility to his latest endeavour. His previous startup, MosaicML, focused on training and deploying large models and was acquired by Databricks in 2023 for $1.3 billion. Prior to that, Rao co-founded Nervana Systems, a machine learning platform that was snatched up by Intel Corp. in 2016 for an estimated $400 million.

Having served for over two years as VP of the intelligence division at Databricks, Rao officially stepped down last month to dedicate his full attention to Unconventional, Inc. With a history of founding companies that attract major acquisitions and a new goal of achieving “brain scale efficiency,” Rao’s latest move signals a potential seismic shift in the future of computing infrastructure.