An employee at Untether AI in Toronto holds a chip at their office in June, 2024. Advanced Micro Devices has struck a deal to access the Toronto-based startup’s talent as the company winds down.Jessica Lee/The Globe and Mail
Promising Canadian chip startup Untether AI Corp. is winding down after failing to raise money earlier this year, and its engineering employees will be transferred to American company Advanced Micro Devices AMD-T.
The arrangement is known as an “acquihire,” in which one company strikes a deal with another to gain access to talent instead of products or services.
Toronto-based Untether designed computer chips for artificial intelligence applications such as autonomous vehicles, robots and drones, and said its products were far more energy efficient than others on the market.
But the company pivoted too late to the hardware market for powering generative AI applications, such as OpenAI’s ChatGPT, according to two sources familiar with the matter, and struggled to compete against the dominance of Nvidia Corp. NVDA-T in the chip market.
Economic uncertainty owing to U.S. President Donald Trump’s tariff agenda contributed to difficulties raising new funds from investors this year, one of the sources said.
The Globe and Mail is not identifying the sources because they are not authorized to discuss the matter.
Untether said in a statement on its website Thursday that it had entered into a “strategic agreement” with chipmaker AMD, which is based in California.
“While today marks the end of Untether AI’s journey, we are proud of the pioneering research that underpinned our work,” the statement says. The company added it will no longer supply or support its hardware and software products.
AMD said in a statement to trade publication CRN that it is acquiring “a talented team of AI hardware and software engineers” from Untether.
One source said the value of the deal would likely be less than US$100-million depending on how many employees agree to join AMD. The source added that Meta Platforms Inc., which is working on custom chips for AI applications, was also in talks with Untether.
It is not clear what will happen to Untether’s intellectual property, which is not part of the transaction, but the source said it could be sold separately.
Neither Untether nor AMD immediately replied to a request for comment.
Chris Walker, Untether’s chief executive, left the company in May, according to his LinkedIn profile. He did not reply to The Globe and Mail.
Untether was founded in 2018 and received funding from Intel Capital, Radical Ventures, GM Ventures and Canada Pension Plan Investment Board. The company has raised around $150-million.
That means that, given the potential value of the deal with AMD, investors are likely not recouping the total amount they invested. However, losses will depend on when investors first put money into Untether.
The company’s products were built on the research of co-founder and former University of Toronto professor Martin Snelgrove, who pioneered a different computer chip architecture.
The dominant approach to chip-making has followed a design laid out by mathematician and physicist John von Neumann in 1945, but that design wastes a lot of energy shuttling data around. Untether cut the distance that data must travel by placing memory and processing units side-by-side on the hardware.
Untether pursued the self-driving vehicle market and other systems that use a form of AI know as computer vision, which involves detecting and interpreting objects in videos and images. But the AI world changed with the release of ChatGPT in late 2022, as companies became obsessed with generative AI and chatbots.
Nvidia later became the most valuable publicly traded company in the world, as large tech firms scrambled to purchase chips to install inside data centres for training AI models. Untether aimed to compete with Nvidia in the much larger market for powering AI inference, the term for using an AI model after it is built, such as asking a question of ChatGPT.
Independent tests gave Untether’s products high marks. MLCommons, an industry and academic consortium that benchmarks AI systems, found last year that one of Untether’s chips was six times more energy efficient than competing products, and with lower latency, in one testing category.
But Untether’s push into the market for chips housed in data centres for generative AI may have come too late, especially given Nvidia’s scale and reputation. The California-based company is worth close to US$3.5-trillion.