AI chip company DEEPX gets $80 million in Series C at a value of $529 million.

DEEPX is a South Korean startup that specializes in developing on-device AI chips, also known as neural processing units (NPUs), as well as the accompanying hardware and software for a wide range of AI applications in electronic devices. This week, the company disclosed that it has secured $80 million (KRW 108.5 billion) in a Series C funding round, valuing the company at $529 million (KRW 723 billion). This valuation represents a significant increase of over eight times compared to its previous funding round, which amounted to approximately $15 million in 2021.

The Series C funding, amounting to approximately $95 million, will be allocated to the mass production of the startup’s initial products, DX-V1, DX-V3, DX-M1, and DX-H1. These products are scheduled to be manufactured in late 2024 and distributed worldwide. The startup will utilize the new capital to accelerate the development and release of its upcoming advanced language model (LLM) on-device solutions.

Lokwon Kim, the current CEO, founded DEEPX in 2018. He has prior experience at Apple, Cisco Systems, the IBM Thomas J. Watson Research Center, and Broadcom.

According to a recent report, the global market size of edge AI, also known as on-device AI, is expected to increase from $11.98 billion in 2021 to $107.47 billion by 2029. “According to Kim’s statement to TechCrunch, the on-device AI market, which does not include edge servers, necessitates the implementation of AI capabilities without relying on servers or the cloud.” Advancements in computer vision technologies like facial and voice recognition, smart mobility, robotics, the internet of things, and physical security systems are what are driving the growth of the on-device AI market.

Kim stated that the commencement of mass production this year will enable potential customers, such as end-product manufacturers, to incorporate DEEPX’s AI chips into their products for commercialization by 2025.

DEEPX, with approximately 65 employees, is not the sole company that has created artificial intelligence (AI) chip solutions. The Korean company is in competition with Hailo, which recently secured a funding round of $120 million; SiMa.ai, which also closed a funding round of $70 million in April; and Axelera, a Belgian AI chip startup that obtained $27 million in funding in 2022.

Kim stated that his company’s unique selling points consist of cost effectiveness, energy efficiency, and All-in-4 AI Total Solution, which is a comprehensive solution for diverse AI applications. The All-in-4 AI solutions offered by the company consist of two models: DX-V1 and DX-V3. These models are specifically designed for vision systems used in various applications, such as home appliances, surveillance cameras, robot vision, and drones. Additionally, the company also offers two other models, DX-M1 and DX-H1, which are designed for AI computing boxes, AI servers, smart factories, and AI booster chips. According to Kim, DEEPX currently has over 259 patent applications awaiting approval in the United States, China, and South Korea.

“According to Kim, Nvidia’s GPGPU-based solutions are highly cost-effective for large language model services such as ChatGPT. The power consumption of the GPUs used in these services has reached levels that surpass the electrical energy consumption of an entire country.” “The utilization of collaborative operation technology, combining server-scale AI and on-device large AI models, is anticipated to significantly decrease energy consumption and costs in comparison to relying exclusively on data centers.”

The startup is currently in the early stages and has not acquired any customers. However, it is actively engaging with over 100 potential clients and strategic partners, including Hyundai Kia Motors Robotics Lab and Korean IT company POSCO DX, to conduct tests on DEEPX’s AI chip capabilities.

SkyLake Equity Partners, a South Korean private equity firm that specializes in technology, was in charge of the most recent investment. The former president of Samsung LED and Samsung Electronics’ memory chip unit founded BNW Investments, a Korean private equity firm, also took part in the investment. AJU IB and the previous investor, Timefolio Asset Management, also took part in this funding round.