Japan's NEDO Taps Tenstorrent, Preferred Networks for AI Chip Research

Japan's New Energy and Industrial Technology Development Organization (NEDO) has selected Tenstorrent and Preferred Networks for a government-backed chip research project centered on xPU design and photonics-electronics integration. Under the arrangement, Preferred Networks will lead AI chiplet development, while Tenstorrent will develop open-architecture CPU chiplets featuring confidential-computing capabilities. Notably, no project value, contract number, or solicitation details were disclosed, positioning this development as a market and technology signal rather than an identified open bid opportunity for contractors. For GovCon professionals tracking advanced semiconductor procurement, the selection underscores Japan's strategic intent to build domestic capability in chiplet architectures, photonic interconnects, and secure computing — areas with growing relevance to defense, intelligence, and high-performance computing programs worldwide.

The NEDO selection reflects a broader pattern of allied governments investing in advanced chip design as a matter of economic security and technological sovereignty. Japan has been steadily expanding its semiconductor policy toolkit, and NEDO's role as the implementing agency for industrial technology development makes this project a bellwether for future funding flows. Companies developing AI hardware, chiplet integration, or photonics technologies should view this as an indicator of potential technology and teaming activity in the Japanese market — not as an available solicitation. Because no procurement value or bid details were released, the practical takeaway for contractors is to monitor NEDO's program announcements and build relationships with the selected primes, rather than prepare a bid response. The confidential-computing angle is particularly significant, as secure enclave and trusted execution capabilities are increasingly demanded in defense and government AI workloads.

Separately, Tenstorrent's $1.5 billion Series E financing at a $6.2 billion post-money valuation dramatically strengthens its capacity to scale hardware and IP development. The round was led by Trace Capital and Innovation X, with participation from a deep bench of new and existing investors including Agostinelli Group, ARK Invest, Brett Barna, Cadence Ventures, Eclipse, Fidelity Management & Research Company, Maverick Silicon, Morgan Stanley, Protagonist, Sandisk, T. Rowe Price, Tether Investments, Troluce Capital, Virtu Financial, and XTX Markets. This raise more than doubled the $2.6 billion valuation Tenstorrent fetched in its previous financing in December 2024. The capital will be used to deploy Galaxy servers at scale, continue serving open-weight models across LLMs and video generation, and advance the RISC-V CPU and AI core IP it licenses to customers designing their own silicon, including Samsung and LG.

Tenstorrent's positioning as an open-architecture alternative to proprietary chip designs carries competitive implications for the AI data center market long dominated by Nvidia. CEO Jim Keller, whose technical career spans key engineering roles at Apple, AMD, Tesla, and Intel, framed the company's strategy bluntly: "We built one architecture and sell it at every size." He added, "The future of compute is open, scalable, and owned by the people building on it." Investors pointed to the company's dual focus on chips and software as a differentiator. George Bousis, Co-Founder and Managing Partner at Protagonist, said, "Tenstorrent does both, and its video generation results beat industry benchmarks ahead of our expectations. We are excited to double down in the Series E to back Jim and the team through this next phase of growth." Trace Capital founder Ben Mahdavi echoed that confidence, stating, "Jim and his team bring decades of hands-on silicon, software, and IP experience, and we're excited to partner with Tenstorrent as Galaxy continues to scale." Earlier in the year, Tenstorrent held talks with companies including Intel and Qualcomm about a possible takeover, according to Bloomberg — talks that ultimately did not result in a deal, preserving Tenstorrent's independence.

• NEDO selected Tenstorrent and Preferred Networks for a government-backed chip research project on xPU design and photonics-electronics integration.
• Preferred Networks will lead AI chiplet development; Tenstorrent will develop open-architecture CPU chiplets with confidential-computing features.
• No project value, contract number, or solicitation details were disclosed — treat this as a technology and teaming signal, not an open bid opportunity.
• Tenstorrent raised $1.5 billion in Series E financing at a $6.2 billion post-money valuation, more than doubling its $2.6 billion valuation from December 2024.
• The round was led by Trace Capital and Innovation X, with participation from Fidelity, Morgan Stanley, ARK Invest, T. Rowe Price, Sandisk, Tether Investments, and others.
• Funding will scale Galaxy servers, advance RISC-V CPU and AI core IP licensing, and support open-weight LLM and video generation workloads.
• Tenstorrent licenses IP to chip designers including Samsung and LG, positioning itself as an open-architecture alternative to proprietary AI chip architectures.
• CEO Jim Keller previously held key engineering roles at Apple, AMD, Tesla, and Intel; earlier takeover talks with Intel and Qualcomm did not result in a deal.