Sources: Naveen Rao’s new AI hardware startup targets $5B valuation with backing from a16z 

Naveen Rao, who was previously the pinnacle of synthetic intelligence at Databricks, is in talks to lift $1 billion at a $5 billion valuation for a brand new startup referred to as Unconventional, Inc., that’s constructing a brand new kind of laptop, in line with 4 individuals conversant in discussions. 

Andreessen Horowitz has agreed to steer the funding, and Lightspeed and Lux Capital are additionally collaborating within the deal, two of the sources stated, though none of these VC corporations responded to our request for remark. Databricks can be stated to be investing in Rao’s new firm, Bloomberg reported final month. 

Rao has already raised a whole lot of hundreds of thousands and plans to start constructing the startup with out ready for the complete $1 billion spherical to shut, our sources stated. He plans to lift the remainder of the capital in installments, a funding strategy generally known as a “tranched” spherical. 

Rao declined to remark, though he did publicly acknowledge the brand new startup on X final week, confirming its title and describing its hoped-for product as “rethinking the foundations of a pc to construct a brand new substrate for intelligence that’s as environment friendly as biology. Mind Scale Effectivity with out the organic baggage!”

Databricks acquired Rao’s earlier startup, MosaicML in 2023, for $1.3 billion. Based by Rao in 2020 with a deal with coaching and deploying giant AI fashions, MosaicML raised $33.7 million from buyers, together with Lux Capital, DCVC, Playground International, and Samsung Subsequent, in line with PitchBook. Previous to MosaicML, Rao co-founded the machine studying platform Nervana Methods, which Intel Corp. acquired in 2016 for reportedly greater than $400 million. 

Rao, who spent over two years as VP of AI at Databricks (now valued at $100 billion and producing $4 billion in ARR), left the corporate final month to deal with his new startup, in line with his LinkedIn profile and earlier reporting by Bloomberg.

Our sources say Rao’s imaginative and prescient will primarily compete with Nvidia by designing a novel AI machine that features each customized silicon chips and server infrastructure.