d-Matrix, a Microsoft-backed semiconductor startup, has shipped its first AI chip to market.

MatX, a chip-design startup focused on supporting large language models, has raised $80 million in its latest funding round, according to tech news platform TechCrunch. This follows a $25 million seed round conducted less than a year ago. The funding round was led by Spark Capital and values the company at a pre-money valuation in the mid-$200 million range and a post-money valuation in the low $300 million range. MatX was co-founded two years ago by former Google TPU team members Mike Gunter and Reiner Pope, who aim to address the global shortage of AI-specific chips.

The company's chips are optimized for AI workloads of 7 billion to 20 billion parameters or more, providing high performance at lower costs. MatX highlights its advanced interconnect technology, which enhances scalability for large clusters. The co-founders claim their processors are designed to outperform NVIDIA GPUs, with a goal of achieving tenfold efficiency in training LLMs and delivering results.

Microsoft Corporation (NASDAQ:MSFT), a Washington-based technology company, has been active in the AI hardware sector. d-Matrix, an AI startup backed by Microsoft, recently announced the shipment of its first AI chip, which aims to revolutionize how artificial intelligence handles user interactions. The startup has raised more than $160 million so far, with the venture capital arm of Microsoft participating in this funding. d-Matrix specializes in AI inference hardware and focuses on optimizing the process of managing user requests on trained AI systems, such as chatbots and video generators. Overall, MSFT ranks 2nd on the list of AI stocks on Wall Street's radar.

The AI hardware sector has seen growing investor interest amid increasing demand for chips tailored for generative AI. Insider Monkey's quarterly newsletter strategy selects 14 small-cap and large-cap AI stocks every quarter, having returned 275% since May 2014, beating its benchmark by 150 percentage points.