European AI chip startup Axelera wins AI factory supply deals and launches its second-generation chip.

Dutch chipmaking startup Axelera AI has signed multiple contracts to supply chips to AI factories, the company announced Tuesday as it launched "Europa," its second generation of chips, which can be used in specified Dell and Supermicro products. An AI factory is a data centre or scientific computing centre devoted to training and running artificial intelligence software.

CEO Fabrizio Del Maffeo declined to give precise details but said the company now has more than 600 customers using Axelera's chips for applications in security, defence, AI factories and enterprise settings. "We have signed deals worth tens of millions," he said. The company is pursuing $1.5 billion in potential sales, though that figure does not represent orders or revenue.

Privately-held Axelera has raised more than $450 million since its founding in Eindhoven in 2021. The European Union is revamping its existing network of supercomputing centres into AI factories to narrow the gap with the U.S. and China and ensure local firms and scientists have access to AI computing power.

Axelera is working with Dell and systems integrator E4 as one of the suppliers of the EU-backed IT4LIA project in Italy and the EU-backed MeluXina project in Luxembourg, among others.

The company is among European chip startups attacking the AI inference market—chips used to run, rather than train, AI models. Its first-generation Metis chips targeted "edge applications" used on site, such as analysing security data at a factory. Europa is designed for heavier jobs on corporate servers, while a future "Titania" chiplet architecture will target data centres and supercomputers.

European competitors include France's VSORA, Britain's Fractile, Spain's Semidynamics and the Netherlands' Euclyd. Euclyd separately announced a €200 million ($230.80 million) funding round on Tuesday.