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

Naveen Rao, the former head of artificial intelligence at Databricks, is spearheading a new venture called Unconventional, Inc., which aims to revolutionize computing. Reports indicate that Rao is negotiating to secure $1 billion in funding at a $5 billion valuation for his startup, with backing from prominent venture capital firm Andreessen Horowitz. In addition to Andreessen Horowitz, Lightspeed and Lux Capital are also expected to participate in this funding round. Although these firms have not issued comments regarding their involvement, it has been noted that Databricks is likely to invest in Rao's new venture as well. Rao has already attracted hundreds of millions in investment and intends to kickstart operations without waiting for the complete funding round to finalize. This approach, described as a "tranched" funding strategy, will allow him to secure additional capital in phases. While Rao has refrained from providing detailed comments, he recently took to social media to officially announce the launch of Unconventional, Inc. He articulated a bold vision for the startup, aiming to “rethink the foundations of a computer” in order to create a new substrate for intelligence that mirrors the efficiency of biological systems, all while shedding unnecessary biological constraints. Previously, Rao founded MosaicML, which focused on training large AI models and was acquired by Databricks in 2023 for $1.3 billion. MosaicML successfully garnered $33.7 million in investments from various backers, including Lux Capital and Samsung Next. Before his venture with MosaicML, Rao co-founded Nervana Systems, which was acquired by Intel in 2016 for more than $400 million. Having spent over two years as Vice President of AI at Databricks, a company now valued at $100 billion, Rao left last month to dedicate his efforts to Unconventional, Inc. His new company aims to challenge industry giants like Nvidia by developing innovative AI machines that integrate custom silicon chips with advanced server infrastructure.