Preferred Networks, a Japanese firm, is increasing its investment in customized artificial intelligence chips to secure access to crucial hardware as developments in generative AI fuel a worldwide investment boom.

In 2016, the business, whose investors include Toyota and Fanuc, started building its first-generation AI chip to power its supercomputers.

“We knew we needed to optimize energy consumption and minimize procurement risk, which could make it difficult to sustain our business,” said Toru Nishikawa, co-founder and CEO of Preferred Networks.

Companies all around the globe are trying to get AI processors as the technology’s potential grows, with Amazon and Microsoft among those building chips in-house.

Preferred Networks has finalized the design of its second-generation AI chip, which will power its new supercomputer and is being produced by TSMC.

The business claims that its chips have been optimized for AI activities, with reduced power consumption and more computational capacity, in part by moving processes that were previously done by hardware to software.

Preferred Networks intends to deliver its newest technology for massive language model building and medication discovery to consumers next year, and pure computing power to customers by 2027.

AI businesses attracted more investment in 2023, demonstrating growing faith in AI’s economic and technical potential. This spike in investment includes both high-risk projects and steady, long-term movements, highlighting the sector’s vitality.

The year 2023 has seen a phenomenal increase in investments in artificial intelligence (AI), marking a critical milestone in the advancement and use of the technology.

Backing up a little, the surge in AI investment isn’t quite new. In 2021, investors will have invested $29.5 billion in AI firms.

However, this value pales in comparison to the sums invested in the industry so far this year. The size of the investment has increased rapidly, demonstrating investors’ growing confidence and interest.

More than 25% of all investment money in American startups will be directed toward AI-related firms in 2023, a huge rise from prior years (where it averaged about 12% between 2018 and 2022).

Artificial intelligence (AI) chips are hardware components that accelerate deep learning-based applications. They are a sort of accelerator used in deep neural networks (DNNs) and other machine learning models. AI chips boost performance by optimizing tasks and allowing for bigger datasets.