AI chip startup Tenstorrent, valued at $3 billion, has laid off 7.5% of its workforce, reducing its headcount to around 1,000 employees. Under the leadership of renowned chip architect Jim Keller, the company clarified that this was a strategic reorganization aimed at aligning with a pivotal business evolution, not a cost-cutting measure driven by financial distress.
The layoffs were broadly distributed, reflecting two core strategic shifts. First, Tenstorrent is fully adopting AI-assisted programming tools to boost R&D efficiency. Jim Keller stated that while some teams successfully adapted, others did not, leading to optimization. Second, the company is fundamentally changing its sales strategy, moving from an enterprise-focused model to deeply engaging with individual developers, which reduced the need for its enterprise sales team. Its IP licensing business, however, retains its dedicated sales force.
Founded in 2016 with backing from investors like Jeff Bezos, Tenstorrent aims to develop scalable AI accelerators as an alternative to NVIDIA GPUs. It differentiates itself by leveraging open-source technologies and avoiding the high costs associated with High Bandwidth Memory (HBM). The company is also making significant strides in RISC-V CPU technology, recently launching its high-performance TT-Ascalon CPU IP which competes with leading Arm cores for servers and automotive applications.
ICgoodFind's Insight
Tenstorrent's strategic layoffs highlight a focused pivot towards high-potential areas like developer ecosystems and RISC-V IP licensing. In a market dominated by giants, this move aims to streamline operations and concentrate resources on building a sustainable, differentiated competitive edge.
