US-based hardware startup Unconventional AI has acquired Israeli chipmaker NeuReality in a cash-and-stock deal for an undisclosed amount, as it seeks to accelerate the development of energy-efficient artificial intelligence chips.
Founded less than a year ago, Unconventional AI was valued at $4.5 billion and raised $475 million in December. The company is led by Naveen Rao, who previously sold chip startup Nervana to Intel for more than $400 million and AI software company MosaicML to Databricks for $1.3 billion.
Based in Mountain View, California, Unconventional AI aims to develop chips that are 1,000 times more energy-efficient than existing alternatives by applying principles inspired by biological systems.
Rao said the company initially expected to spend three years on research and development and five years developing a product. However, advances in the use of artificial intelligence tools have accelerated its progress, with the startup already developing its first test chip and nearing completion of a second.
The acquisition is expected to strengthen the company’s engineering capacity as it moves from research to commercial production.
NeuReality was founded in 2019 by Moshe Tanach, a former employee of Marvell Technology and Intel, alongside Tzvika Shmueli and Yossi Kasus. The Israeli startup had developed several advanced AI chips before the acquisition.
Rao, who served on NeuReality’s board, said about 40 employees would join Unconventional AI under the deal. The company also plans to maintain a presence in Israel as it expands its operations.