Jeff Bezos, alongside Samsung, has invested $700 million in Tenstorrent, a startup focused on developing AI chips aimed at competing with Nvidia. This investment has raised Tenstorrent's valuation to approximately $2.6 billion. The funding will enhance the company's engineering team and expand its AI training server capabilities, positioning it to capture a share of the growing AI market, which is currently dominated by Nvidia's high-performance chips. Tenstorrent's strategy includes utilizing open-source technologies and common components to reduce costs and improve compatibility with other tech providers.

The AI chip market is witnessing increased competition as companies like Tenstorrent and others aim to disrupt Nvidia's stronghold. Nvidia's market cap has soared to around $3.2 trillion, making it a key player in the AI sector. Tenstorrent's approach, which includes developing chips based on the RISC-V architecture, presents a challenge to established players like Arm Holdings. However, Tenstorrent is still in its early stages, with only $150 million in contracts compared to Nvidia's substantial revenue. The investment from Bezos and Samsung reflects a broader trend of significant capital flowing into AI technologies.