- Lip-Bu Tan is a well-known chip industry veteran with experience as a CEO, board member and investor.
- Tan has held roles at Intel and SoftBank and brought Cadence back from the brink of crisis.
- Tan invests in startups that challenge Nvidia’s GPUs with efficient alternatives.
When Lip-Bu Tan speaks, the chip industry listens.
The semiconductor executive and investor has wielded his influence over most of the top names in the chip business and served on the boards of Annapurna Labs — which now drives Amazon’s chip ambitions — SoftBank and Intel, among others.
Tan was even reported to be a candidate for Intel’s open CEO position, though when Business Insider spoke to him, he smiled and said “no comment” on the matter.
His legendary status was cemented long ago when he orchestrated an intervention at Cadence Design Systems – a semiconductor design firm in crisis.
He stepped in as CEO in 2009 with shares below three dollars. He revamped the company’s approach to its technology roadmap and customer relationships and revised the business model from a perpetual license model to a subscription one. Today, the stock is over $320 per share. He remained in the position of CEO until 2021.
Such is Tan’s reputation that on the day he resigned from Intel’s board in August, the firm’s shares fell 6%.
He is supporting many players in the AI boom with funding and advice, he said. His investment firm, Walden International, has more than $1.5 billion in assets under management and funds startups through its $500 million Walden Catalyst venture fund, which he founded in 2021 with fellow veteran of the chip industry, Young Sohn.
Nvidia investment alternatives
Tan is also a personal friend of AMD CEO Lisa Su and Nvidia CEO Jensen Huang.
In fact, Tan told BI that when Huang told him years ago that Nvidia would be a full-platform company with software as valuable as its hardware, they argued.
“I said, ‘No, you’re a semiconductor company.’ And he said, ‘No, you’re completely wrong, I’m a software and systems company,'” Tan recounts.
Today, Tan admits Huang was right. Nvidia’s CUDA software is the envy of many trying to compete with the $3 trillion turnover. Profit margins of 70% also make it look more like a software company than a chip firm.
But graphics processing units have a problem. They are “power hungry”, Tan said. That’s where his attention is going when it comes to new companies looking to challenge Nvidia.
Tan personally invested in SambaNova Systems in 2018 for this reason.
“We can deliver the same performance with one-tenth the power,” he told SambaNova.
Tan is also an investor in startup Rivos, which was founded in 2021. Both companies offer an alternative computing architecture to Nvidia and AMD GPUs and claim to offer dramatic gains in power, speed and cost efficiency.
“Everybody is looking for an alternative. They’re still spending a lot of time with Nvidia, but they’re looking for 10%, or 15% of different workloads that could use a better solution,” he said.
That minority of the market, driven by concerns about cost and diversification, is where the opportunity for Nvidia’s alternatives lies, he said.
At the top of the startups, AMD and companies like Broadcom, Marvel and Micron Technology will also grow as the need for computing expands, he said.
He is particularly looking for opportunities in industries where AI can have a big impact. Supporting smart investments in applied AI means knowing where the data is, according to Tan.
“AI is already a 60-year-old technology. But really, the big change is data, massive, massive data that is starting to become available,” he said.
“Whatever business you want to be in, you have to be close to the data. If you’re close to the data, you have a very strong chance of success,” he continued. Healthcare artificial intelligence — identifying important biomarkers and drug discovery — is where he sees the most opportunity today.
“I’m investing heavily in medicine,” he said.