The US startup Tenstorrent Inc. will collaborate with a government-backed research group in Japan to design the country's first cutting-edge artificial intelligence chip.

Japan's government-funded semiconductor research team will collaborate with US startup Tenstorrent Inc. to construct the company's first cutting-edge artificial intelligence chip.

Leading Tesla Inc. and Apple Inc. veteran Jim Keller, Tenstorrent, will co-create the entire chip and license its design for a portion of Japan's AI accelerator, the US business announced at a joint presentation in Tokyo on Tuesday. Tenstorrent is a company that uses the open-source RISC-V standard to give users an option compared to industry leaders Nvidia Corp. and Arm Holdings Plc. These companies use their own so-called instruction sets to facilitate communication between hardware and software.

In an attempt to regain a leading position in the semiconductor sector, the Japanese government is sponsoring a variety of programs ranging from research to advanced chip manufacturing, with a $67 billion budget. With the intention of manufacturing the jointly built AI chips at the government-backed firm Rapidus Corp., the Tenstorrent agreement can further those efforts.

The 18-month-old business plans to start producing chips in 2027, competing with market heavyweights Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Co. However, Rapidus will require clients for its establishment, and Keller's group observes Japan striving to guarantee both supply and demand.