Tenspresso, a Sunnyvale, California-based AI chip developer founded roughly three months ago, is negotiating to raise at least $50 million in a round that would value the company at about $500 million, according to people familiar with the matter. The talks follow the startup's securing of $20 million from Striker Venture Partners, and Altimeter Capital Management has since approached Tenspresso about putting in additional money. The company is also speaking with strategic investors, and the final size of the round could still shift. Tenspresso was co-founded by Dong Hyuk Woo and Harshit Khaitan, who spent several years working together on Google's tensor processing units, and much of its 15-person team has come from early AI chip efforts at Alphabet Inc.'s Google. The company is designing silicon for AI workloads that rely on long context windows and aims to finish design work on its first product in late 2027 or early 2028. It is in talks with design and manufacturing partners and is looking at options outside the conventional silicon supply chain used by Nvidia and Google, a route it hopes will help it avoid component backlogs and secure manufacturing capacity at Taiwan Semiconductor Manufacturing Co. Industry analysts expect constraints in advanced packaging, high-bandwidth memory and leading-edge production capacity to persist through 2027.