Sagence AI is developing energy-efficient analog chips to address the growing power demands of AI workloads, aiming to complement GPUs and transform the AI hardware market with a 2025 launch. (Source: Image by RR)

Analog Chips Gain Traction as AI Models Drive Energy Demands Skyward

The increasing reliance on GPUs for running AI models is driving a substantial rise in electricity demand, with a 160% increase predicted by 2030, according to Goldman Sachs. Sagence AI, led by chip industry veteran Vishal Sarin, is developing energy-efficient analog chips to address the performance, cost, and environmental limitations of traditional digital chips like GPUs. Unlike digital chips, analog chips use a range of values for data representation, which reduces bottlenecks and increases data density while consuming significantly less power. Sagence’s chips aim to complement, not replace, digital chips by accelerating specialized AI applications.

Analog technology, although promising, has challenges such as achieving high precision and complex programming. Sagence’s in-memory analog chips avoid the data transfer bottlenecks seen in digital designs and promise to deliver high performance with reduced power consumption and latency. Sarin emphasizes that Sagence’s approach addresses inherent inefficiencies in GPU hardware, making their chips suitable for both server and mobile device applications. The company, as reported in techcrunch.com, plans to launch its products by 2025 and is engaging with multiple customers to integrate its technology into existing infrastructure.

Sagence has raised $58 million since its founding, with investments from prominent backers like Vinod Khosla, TDK Ventures, and Aramco Ventures. The company is preparing for another funding round to expand its team and scale production. Unlike competitors chasing cutting-edge manufacturing processes, Sagence focuses on cost-effective production methods, positioning itself as a viable alternative in the competitive AI chip market. With the semiconductor funding landscape showing signs of recovery, Sagence hopes to capitalize on growing interest in energy-efficient AI hardware.

Despite its potential, Sagence faces significant challenges, including competing with entrenched players like Nvidia and overcoming customer loyalty to existing ecosystems. The fate of rivals like Graphcore, which struggled to secure market share despite substantial funding, underscores the risks involved. To succeed, Sagence must demonstrate that its analog chips deliver the promised power savings and performance advantages while securing sufficient funding to manufacture at scale and meet market demand.

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