Chip startup Rain AI backed by Sam Altman up for sale after funding round flops
Rain AI
, once a promising startup backed by
OpenAI
CEO
Sam Altman
, is exploring a sale after its $150 million Series B fundraising round collapsed, the New York Post reports. Sources familiar with the matter told the Post that OpenAI is among the suitors circling the company, which develops energy-efficient chips designed to outperform industry leader
Nvidia
.
In acquisition talks for weeks, with no offer as yet
Rain AI has been in acquisition talks for weeks, with no formal offer yet from OpenAI, according to the Post. Altman, a key investor in Rain AI's $25 million seed round in 2022, is reportedly looking to salvage his investment. 'Sam Altman is looking to bail out his investment by having OpenAI acquire Rain for pennies,' a source close to the situation told the Post.
Took loan to stay afloat
The startup has faced significant challenges, including the quiet departure of co-founder and CEO Will Passo, who stepped down for personal reasons, the Post reports. Co-founder Jack Kendall has taken over as CEO, as confirmed on Rain AI's website. In an email obtained by the Post, Kendall acknowledged the company's struggle to secure Series B funding to compete with giants like Nvidia, prompting a pivot to finding a buyer. Rain AI has been burning through cash and recently secured a $3 million bridge loan to stay afloat during sale negotiations, a source told the Post.
'They are in active conversations with suitors,' the source said, noting that major tech companies vying for a foothold in the chip industry are involved. However, Rain AI's inability to secure contracts or letters of intent has hindered its progress, despite successful chip testing. 'It is not a great business,' a source told the Post. 'They couldn't get real accounts.'
OpenAI interviewing Rain AI employees
The Post also reported that OpenAI has begun interviewing Rain AI employees to determine which ones to retain in a potential takeover. Rain AI's struggles stem partly from its young founders' lack of industry credentials, with one source telling the Post, 'It appears the founders are good engineers and poor salesmen.'
Rain AI's Series B, initially slated for last December and expected to value the company at $600 million, was repeatedly delayed, the Post noted. Altman had personally pitched OpenAI investors to back the round, as the Post exclusively reported in November. Despite hiring Apple veteran Jean-Didier Allegrucci last year to bolster its chip development, Rain AI has struggled to translate its technology into sales.
Neither OpenAI nor Rain AI responded to the Post's requests for comment.
AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Hindustan Times
43 minutes ago
- Hindustan Times
Another allegation of financial misconduct against HDFC bank CEO
NAGPUR: Already mired in a case of financial fraud involving the Lilavati Kirtilal Mehta Medical Trust, which runs the Lilavati Hospital in Mumbai, HDFC Bank's managing director and CEO Sashidhar Jagdishan is now facing an allegation of financial misconduct and misappropriation of funds, along with other senior officers of the bank, from a trader based in Nagpur. Another allegation of financial misconduct against HDFC bank CEO The Economic Offences Wing (EOW) of Nagpur police have initiated an investigation against the senior officers of the bank, including Jagdishan, for siphoning off approximately ₹6 crore from the account of Narendra Singru, a Nagpur-based trader. According to a complaint filed by Singru's lawyer, Ashutosh Ranjan, the Dhantoli branch of HDFC Bank had taken a bond of ₹6 crore from Singru nearly three years ago and invested it in overseas agencies, including entities based in Bahrain. The complaint alleges that the bank failed to disclose the risks associated with the investment and eventually reduced the account balance to zero, without informing the account holder. Ranjan claimed that the entire process was executed with the intent to steal the invested amount. 'It is a clear-cut case of financial fraud. The bank never warned my client of the associated risks, and the funds were deliberately drained,' he said, demanding strict action against the responsible officials. Others named in the complaint include, Komal Gupta (regional head), Ashish Nichani (associate director), and Yash Gajaria (relationship manager) of HDFC Bank. Deputy commissioner of police (EOW), Nagpur city, Mahak Swami confirmed that the complaint was received by the department. 'We have just received the complaint. The matter is under inquiry and investigations are on,' she said.
Indian Express
an hour ago
- Indian Express
UN report urges stronger measures to detect AI-driven deepfakes
Companies must use advanced tools to detect and stamp out misinformation and deepfake content to help counter growing risks of election interference and financial fraud, the United Nations' International Telecommunication Union urged in a report on Friday. Deepfakes such as AI-generated images and videos, and audio that convincingly impersonates real people, pose mounting risks, the ITU said in the report released at its 'AI for Good Summit' in Geneva. The ITU called for robust standards to combat manipulated multimedia and recommended that content distributors such as social media platforms use digital verification tools to authenticate images and videos before sharing. 'Trust in social media has dropped significantly because people don't know what's true and what's fake,' Bilel Jamoussi, Chief of the Study Groups Department at the ITU's Standardization Bureau, noted. Combatting deepfakes was a top challenge due to Generative AI's ability to fabricate realistic multimedia, he said. Leonard Rosenthol of Adobe, a digital editing software leader that has been addressing deepfakes since 2019, underscored the importance of establishing the provenance of digital content to help users assess its trustworthiness. 'We need more of the places where users consume their content to show this information…When you are scrolling through your feeds you want to know: 'can I trust this image, this video…'' Rosenthol said. Dr. Farzaneh Badiei, founder of digital governance research firm Digital Medusa, stressed the importance of a global approach to the problem, given there is currently no single international watchdog focusing on detecting manipulated material. 'If we have patchworks of standards and solutions, then the harmful deepfake can be more effective,' she told Reuters. The ITU is currently developing standards for watermarking videos – which make up 80% of internet traffic – to embed provenance data such as creator identity and timestamps. Tomaz Levak, founder of Switzerland-based Umanitek, urged the private sector to proactively implement safety measures and educate users. 'AI will only get more powerful, faster or smarter… We'll need to upskill people to make sure that they are not victims of the systems,' he said.
Hindustan Times
an hour ago
- Hindustan Times
Pvt plane owners seek ministry help to reclaim space
Mumbai's billionaires are in a bind and fear their wings will be clipped soon as an order by the Adani Group-promoted Mumbai International Airport Limited (MIAL), issued in January, will bar them from parking their private aircraft at the busy Chhatrapati Shivaji Maharaj International Airport (CSMIA) after July 31, as the space will be used for the airport's expansion. With the deadline pressing close, they approached the Ministry of Civil Aviation seeking cancellation of the order revoking permit. With the deadline pressing close, they have been represented by the Business Aircraft Operators Association (BAOA) that has approached the Ministry of Civil Aviation, seeking cancellation of the order and directing the operator of Navi Mumbai International Airport (NMIA) to allot space, failing which they will be left with no space within India's financial capital. BAOA claims, that their parking permits at CSMIA will be withdrawn starting July 31 was communicated to them through a letter in January, as MIAL is looking to redevelop the asset and were promised space at the NMIA, which has not fructified as it subsequently came to light that NMIA and CSMIA – both promoted by the Ahmedabad-based Adani Group -- operate as separate bodies. This was underscored in the letter written to the ministry on July 9, a copy of which is with HT. In it, BAOA which represents the interests of General Aviation and Business Aviation operators in India (including Hindalco Industries Ltd, Reliance Commercial Dealers Ltd, Reliance Transport & Travels Ltd., Taj Air Ltd, JSW Steel Limited, Grasim Industries Ltd, Futura Travels Ltd, and Larsen & Toubro Ltd.), claimed that those who are based in Mumbai are facing the threat of eviction from their existing parking spaces at CSMIA and without any possibility of an alternate relocation at NMIA. 'Parking permits have been cancelled on account of the redevelopment activities proposed to be undertaken at CSMIA, and no alternative parking space can be provided at CSMIA. It claimed that to allocate parking space at NMIA, operators will have to approach Navi Mumbai International Airport Private Limited (NMIAL) because MIAL and NMIAL are separate entities,' reads the communication to the Ministry of Civil Aviation. Terming the move as a 'complete contravention to the stakeholder-centric approach,' BAOA is seeking reliefs from the ministry, such as cancellation or suspension of directions for eviction issued by MIAL, until a decision on an alternative space allocation is taken. It has also urged MIAL and NMIAL to engage in 'structured consultations with the affected aircraft operators and other stakeholders'. Other requests include directions to ensure that in the interim alternate parking spaces are allocated to general and business aviation operators at NMIAL, as and when it commences operations until permanent parking arrangements at CSMIA are re-established, adhering to Airports Economic Regulatory Authority of India (AERA) tariff guidelines. Justifying the cancellation of the January order, BAOA highlighted that MIAL's new master plan of redevelopment was submitted in September 2024 for approval to increase the capacity of CSMIA. This plan covered projects such as additional aircraft parking stands in the southern side of RWY 09-27, which affect the general and business aviation operators directly. However, the control period for CSMIA's tariff order clearly states that the master plan 2024 is still awaiting inter-ministerial and departmental comments, and it would have to be revisited, aligned with the final comments from the Ministry of Civil Aviation, particularly in reference to the reconstruction of Terminal 1. As an approval is yet to be received, they can be allowed to continue with operations beyond July 31. 'MIAL has no authority to take any decision regarding the cancellation of the parking permits to general and business aviation operators by itself or levy any penal charges on account of unauthorised parking and without authorisation of the eviction officer or Airports Authority of India,' Group Captain (retd) Rajesh K Bali, managing director, BAOA, claimed and called MIAL and NMIAL's actions 'unilateral, arbitrary and discriminatory'. Mails sent to MIAL and NMIAL by HT for their views did not elicit a response. Earlier this year, the International Air Transport Association (IATA) had expressed 'deep disappointment' with the Adani Group-operated MIAL for cancelling slots dedicated to cargo flights starting next season 'unilaterally'. The airline association said the move would 'cause long-lasting damage to the airport's reputation and credibility' and wondered if it was aimed at shifting cargo flights to the upcoming NMIA. The claims were refuted by MIAL.
