Graphics processing units (GPUs), the backbone of most artificial intelligence (AI) models, are notorious for their high energy consumption. According to Goldman Sachs, AI’s reliance on GPUs could increase global electricity demand by 160% by 2030. Addressing this challenge is Sagence AI, a startup founded by Vishal Sarin, a seasoned analog and memory circuit designer. Sagence aims to develop energy-efficient alternatives to GPUs through the use of analog chip technology.

Unlike traditional digital chips, which store information in binary form, Sagence’s analog chips utilize a range of values to represent data. This innovation enables Sagence’s chips to achieve higher data density while eliminating inefficiencies caused by transferring data between memory and processors, a bottleneck typical of GPU hardware. These "in-memory" chips promise reduced power consumption, lower costs, and faster processing speeds, especially for AI workloads.

While analog chips have existed for decades, they faded in popularity due to limitations in precision and programming complexity. However, Sagence believes its technology can complement digital chips rather than replace them. The company envisions its analog systems powering specialized applications, such as server optimization and mobile device acceleration, where traditional GPUs struggle with power and latency constraints.

Sagence plans to launch its first commercial chips by 2025. In preparation, the company is collaborating with several potential customers while ensuring its systems integrate seamlessly into existing infrastructures. With backing from prominent investors such as Vinod Khosla, TDK Ventures, and Aramco Ventures, Sagence has raised $58 million to date. As the company gears up for its next funding round, it aims to expand its team of 75 professionals.

The startup’s approach to chip manufacturing also diverges from conventional methods. By avoiding cutting-edge manufacturing processes, Sagence maintains a cost-effective production strategy without sacrificing performance. This approach may offer the company a competitive edge as the semiconductor industry rebounds from a slow 2023, during which venture-backed chip startups raised a relatively modest $8.8 billion.

Sagence enters a competitive and capital-intensive market where industry giants like Nvidia dominate and challengers often face steep hurdles. For example, AI chipmaker Graphcore, once valued at nearly $3 billion, struggled to compete and eventually filed for insolvency. To succeed, Sagence must demonstrate that its analog chips offer substantial power and efficiency benefits while securing sufficient funding to scale production.

Analog technology’s resurgence could redefine the landscape of AI hardware. By addressing the sustainability challenges posed by GPUs, Sagence offers a glimpse into a future where AI computing is both accessible and environmentally conscious.

TECHCRUNCH