Exclusive-Sequoia-backed chip startup Nuvacore raising funds at about a $2.5 billion valuation, sources say

SAN FRANCISCO - Nuvacore, a six-month-old microchip startup backed by Sequoia Capital, is reportedly seeking to raise funds at a valuation of approximately $2.5 billion to develop a new central processor for data centers, according to sources. The firm, which has not yet launched a product, is targeting a surge in demand for data-crunching capacity to fuel AI technologies like chatbots.

CPUs serve as crucial traffic controllers for Nvidia's AI chips and manage autonomous AI software. The valuation figure has not been previously disclosed, with the earlier reported figure of $200 million coming from The Information. Intel and Advanced Micro Devices control the data center CPU market, while Arm-based chip designers, such as those found in Amazon and Microsoft's custom CPUs, have also sought to enter the market.