Sequoia-backed chip startup Nuvacore raising funds at about a $2.5 billion valuation
Nuvacore is seeking to raise the funds as the appetite for central processors has swollen due to the thirst for data-crunching capacity to power chatbots such as Anthropic's Claude. CPUs perform vital functions as traffic controllers for Nvidia's AI chips and run autonomous AI software known as agents.
Nuvacore, a six-month old chip startup backed by Sequoia Capital, is seeking to raise funds at a $2.5 billion valuation to develop a new central processor for data centers, according to sources familiar with the company's fundraising efforts. The startup, which has not yet released a product, aims to create a CPU that can optimize computations common in data centers and AI infrastructure, according to information provided by two sources.
Nuvacore's unusual design strategy involves building the core functionality of the chip before committing to a specific architecture, such as the x86 used by Intel and AMD or the Arm technology found in many mobile phones. This approach differs from traditional methods, allowing the company's engineers to avoid limitations and requirements associated with specific architectures and optimize the design for the type of computations most common in data centers and AI infrastructure.
The startup, founded by Gerard Williams, John Bruno, and Ram Srinivasan, has declined to comment on the fundraising efforts. Nuvacore earlier this year announced a seed funding round led by Sequoia Capital, joining other young chip startups that have sought billion-dollar valuations before releasing a product. This comes as investor appetite for AI hardware companies has returned.
The last decade has seen less venture capital interest in hardware compared to software due to longer development cycles, higher capital needs, and cyclical demand in the hardware industry. However, investor interest in AI hardware has increased in recent years, with Silicon Valley venture capital firms raising $10.7 billion in semiconductor startups during the first five months of 2026, outpacing the $12.2 billion raised globally in 2025.
Other major players in the data center CPU market, such as Intel and Advanced Micro Devices, have dominated the market for years. Nvidia, which recently launched a CPU called Vera, has also entered the market with high expectations, stating that it expects to sell $20 billion worth of its Vera CPU in the current fiscal year.
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