Naveen Rao’s AI Startup Eyes $5B Valuation With a16z Backing
▼ Summary
– Naveen Rao is raising $1 billion at a $5 billion valuation for his new startup Unconventional, Inc., which aims to build a new type of computer.
– Andreessen Horowitz is leading the investment, with participation from Lightspeed, Lux Capital, and Databricks, as reported by sources.
– Rao has already raised hundreds of millions and plans to use a tranched funding approach, building the startup before the full $1 billion is secured.
– The startup’s goal is to create a computer that achieves brain-scale efficiency, rethinking foundations to be as efficient as biology without its limitations.
– Unconventional, Inc. will compete with Nvidia by designing a novel AI machine with custom silicon chips and server infrastructure.
A new artificial intelligence venture founded by former Databricks AI head Naveen Rao is reportedly negotiating a massive funding round that would value the company at $5 billion. According to sources familiar with the discussions, Unconventional, Inc. aims to secure $1 billion in capital to develop what Rao describes as a fundamentally new type of computer system designed for artificial intelligence workloads.
Andreessen Horowitz has committed to leading this substantial investment, with Lightspeed Venture Partners and Lux Capital also expected to participate. Although these firms have not publicly commented, their involvement signals strong confidence in Rao’s ambitious project. Additionally, Databricks, the data and AI giant where Rao previously served as vice president of AI, is also reportedly planning to invest in the startup, continuing their established relationship.
Rather than waiting for the full $1 billion to be secured, Rao intends to begin operational work immediately, having already raised hundreds of millions in initial funding. The remaining capital will be acquired through a tranched financing structure, allowing the company to receive funds in scheduled installments as it meets certain developmental milestones.
While Rao has declined formal interview requests, he recently took to the social platform X to announce his new company. In his post, he outlined a visionary goal: “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 statement highlights his intent to create ultra-efficient computing systems inspired by biological neural networks.
Rao brings a proven track record in building and exiting successful AI companies. His previous startup, MosaicML, which specialized in training and deploying large AI models, was acquired by Databricks in 2023 for $1.3 billion. Before that, he co-founded Nervana Systems, a machine learning platform that Intel acquired in 2016 for a reported sum exceeding $400 million. After more than two years leading AI initiatives at the now $100 billion-valued Databricks, Rao departed last month to dedicate his efforts entirely to Unconventional, Inc.
The core mission of this new enterprise involves developing a novel AI machine that incorporates both custom silicon chips and server infrastructure. This approach would position the startup in direct competition with industry heavyweight Nvidia, challenging its dominance in the AI hardware sector by aiming to create a more biologically efficient computing substrate.
(Source: TechCrunch)
